Kathy Ruhf of Land for Good, keynote speaker at the workshop, summarizes key considerations when crafting a farmland lease.
We have all heard about how hard it is for beginning farmers to get onto a nice piece of farmland. If you want to be a farmer, one of the biggest challenges is how to gain access to good land, as Kathy Ruhf of Land for Good, a nonprofit that helps farmers access land, will tell you. Land access is especially difficult if you are new to farming, and don’t have farmland in the family.
I am one such individual. My husband and I aspire to – god willing – in a few years – and if all else goes according to plan – gain access to a piece of farmland. We have big dreams, which are slowly but surely evolving into a working farm business plan, for the future dream farm. Depending on how things go, we might lease land, or lease out pieces of land we own, or both. Either way, the topic of farmland leasing is a new one for us, and, honestly, maybe a little intimidating.
Luckily, there is help for people like us. I recently attended an excellent workshop in Charlottesville, put on by the Piedmont Environmental Council, all about farmland leasing. The workshop really boiled down a lot of the sticky points. I’d like to share with you five main points that I found to be super-helpful in understanding farmland leases:
- Leasing can be a great option for beginning farmers looking to gain access to farmland, since it is less financially risky than purchasing land. By leasing their land to a farmer, landowners are helping to keep farmland in production, which helps ensure our community’s food security in the long run, while promoting good stewardship of the land.
- Landowners get a substantial tax break when they lease their land to a farmer. This can be enough that some do not even charge rental fees.
- Farmland leases can (and should!) include lots of specific terms of the agreement, like what sorts of farming practices are or are not allowed, who is responsible for maintenance of things like water and fencing, and when/how each party has access to farm buildings and equipment. This helps both parties know where they stand, and reduces confusion if issues do arise. See Land for Good’s Toolbox for Leasing Farmland for a summary of things to consider.
- If the landowner plans to help farm, and may work on the farm more than 500 hours a year, s/he may be viewed as a sort of “partner” in the farm enterprise, so may have to pay the self-employment tax. This part of farmland leasing has inspired me to always seek consultation by a lawyer while crafting a lease agreement.
- If you’re looking for land to lease in Virginia, check out the Certified Farm Seeker Program. It hooks up experienced farmers who are looking to retire with new and beginning farmers who are looking to get on a piece of land, whether it’s leasing or owning. Some have gone so far as to compare the program with farmersonly.com (online dating for farmers!), but the program is much more than that. While Certified Farm Seeker still certainly requires work on the part of both parties, the program helps that relationship get started, and provides resources beyond, to facilitate the land transfer.
I have learned that leasing farmland is a great option for someone who is looking to get into farming, or wants to expand their farming operation. It is also a good option if one buys farmland, but may not be ready to farm it themselves quite yet (plus, you get a tax break). Most of all, I learned that there is plenty of help for those who want to learn more, so I invite you to click on the links in this blog for more information.
Post Contributed By: Lorien E. MacAuley, M.S.. Lorien is a PhD student of Agricultural, Leadership, and Community Education at Virginia Tech, and works as a graduate research assistant for Virginia Beginning Farmer and Rancher Coalition.