Sustainable farm lease options

Sustainable leases allow for leasing land and investing some income into land improvements. Allowing the land to be managed in a sustainable manner.

Sustainable leases can be implemented that is fair to both the landowner and operator/tenant.

Options for sustainable lease; Factors to consider;

1. Production risk
2. Market risk
3. Capital/financial risk
4. Rate of return
5. Control of assets

Types of lease/sharefarm/alternative lease:

• Lease – % of land value. Usually between 4-7% return.
• Sharefarming – varied responsibility of involved parties.
• Contracting – outsource all management services, cropping, spraying and harvest.
• Joint venture/collaboration farming – synergies of businesses to deliver efficient operations with specialist areas.
• Equity Sharing Lease – opportunity to hedge the production risk between the operator/tenant and owner/landholder. The equity arrangement provides a level of risk acceptable to both parties.