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September 21, 2020
Occasionally there are news articles or studies in different media relating that non-operating landowners don't give enough attention to the conservation of the land. It will be said that they only care about the rental income received or they don't even know where the farm is. Just like any part of the population, there are some landowners that are not as interested in preserving soil quality and conserving the resource, but we find that the vast majority of non-operating landowners do care about how their farm is taken care of as they want to leave it in good shape for the next generation. They just may not know what to do.
Maintaining and improving the underlying asset, the farm, is important for current income and future value for the landowner. This involves many aspects including fertility, controlling soil erosion, improving drainage, controlling field runoff, and improving soil quality. The better and more productive the farm asset, the better the current income for the owner and the future value of the farm will be stronger.
Landowners need good information about the importance of conservation and improvement measures for their farm. Most non-operating landowners rely on their tenant for this information. Good communication by the tenant is key as they should be continually updating the owner about conservation needs and possible improvements for the farm. Sometimes, tenants are hesitant to bring up conservation needs on a farm they rent because they are concerned about losing the farm in the future or that they will need to bear the cost for a short-term lease. A solid plan with benefits delineated along with good communications is the first step in working with a landowner. Sharing of costs and lease terms can then be negotiated to accomplish the conservation improvement.
Another option some non-operating landowners have is to utilize professional farm management services to take care of their farm. Professional managers are proactive in assessing a farm and making on-going recommendations for conservation and improvements. Managers create the plan and provide the communication between landowner and tenant. The ultimate goal for all three parties is to take care of the farm as it will take care of the owner and the tenant for years to come.
Senior Vice President - Real Estate Operations
|Category: Farm Management News|