Crop Share Agreements Alberta

A: It depends on the differences in productivity on this piece of land. An area can grow more rapeseed than you can hold with, and an adjacent section may have trouble producing a decent crop of corn. “Once a price and terms are agreed, the most important thing you can do is put the agreement in writing,” Dyck said. “This one legal act would eliminate most of the disagreements”The Purdue University website goes even further by proposing a table allowing a breeder to compare the rents he would pay for various income, costs and prices under a cash lease, Crop-Share and Flex Cash. While this table is designed for U.S. breeders, it can be easily adapted to Canadian crops. This table is just a link on a website with a wide range of information about land leasing. Crop Share asp rentals are becoming increasingly rare because many landowners do not want to take a risk of yield or price. These leases are usually 75 percent tenants: 25 percent landlords. If fertilizers and chemicals are shared, then the rental contract moves to 66 percent tenants: 33 percent owner. Since the contribution approach requires detailed budgeting, Nibourg indicates that many donors simply do not attach themselves to the market approach for the determination of the share of the crop, support the common allocation in the area and then modify the agreement to reflect unusual circumstances, such as the owner. B that delivers grain deposits or provides some of the work or equipment.

The Canada Revenue Agency verifies whether the owner is involved in the risks and benefits of the farm business when determining whether he is involved in the agricultural activity rather than exploiting rental property. Life rarely works in black and white. If you choose to expand your farm between the portion of the crop or the leases, you need to understand what is best for you and be able to negotiate with a landowner who wants the best for it. While this complicates navigation, it will help gain an appropriate level of confidence, prescient and some good advice to clarify what is the best option for each person concerned. The Alberta government is publishing a guide called “Leasing Cropland in Alberta” that can help you make the decision that works best for you. Instead of looking for a percentage of the land value as rent, Nibourg proposes a way to determine a fair rent in cash, take a quarter of the long-term average yield of the crop to be planted and multiply it by the expected price. However, due to the instability of agriculture and the unpredictability of maternal nature and markets, agriculture is going through boom and bankruptcy cycles. To compensate for these cycles, landowners and farmers can incorporate these variations into the price of the land and set a variable rate for the lease. This means that the farmer can pay a little less in recent years, but it also means that he pays a little more with a bumper crop. The amount of land, buildings and expenses made available by the owner determines its share of the harvest.

It is not uncommon to see that the owners share 18 to 35 per cent of the crop. According to Nibourg, 85 per cent of crop sharing agreements in the province of Alberta allocate one-third of the crop to the owner and two-thirds to the tenant, with the lessor paying one-third of the harvest costs. The take-home, says Dobbins, is that homeowners shouldn`t expect the same yield per hectare with cash rent they can make with a share of the crop, just as farmers don`t expect the same take-home of custom farming as cash rental.