The Rural Voice, 1988-03, Page 53ADVICE
may have to adjust his practices.
The terms of a lease also influence
land management. Land offered for
cash rent on an annual basis will tend to
be managed with only short-term bene-
fits in mind.
A lease with a longer term encour-
ages the tenant to undertake some land -
improving measures and then derive
some benefit. A tenant would be more
likely to use crop rotation, for example,
if he is likely to realize the returns in
following seasons.
Long-term leases also offer security,
though in times of volatile prices and
uncertain returns, many landlords and
tenants are reluctant to commit them-
selves to long-term agreements at a
fixed price.
Rentals based on a crop -share or
variable formula give both the landlord
and tenant some flexibility. Most cash
or share arrangements need to be re-
viewed and adjusted for changing mar-
kets and production techology which
could alter existing cost:return relation-
ships.
A crop -share arrangement can pro-
vide an opportunity to share production
decisions and the subsequent costs and
benefits.
Landlords might also take advan-
tage of the Ontario Land Stewardship
Program, which offers $10 an acre to
landlords who sign a Stewardship Lease
with their tenant. Applicants may re-
ceive up to $3,000 for a rental agreement
covering at least three years. Forms are
available at local offices of the Ontario
Ministry of Agriculture and Food.
Generally, a reasonable planning
horizon can be maintained by creating a
series of three or five one-year leases.
As each year's lease expires, the third or
fifth year's lease is renewed. As with
any other agreement, these leases are
subject to normal notice periods if either
party wants to discontinue the agree-
ment.0
Art Lawson
Farm Business Advisor
London OMAF
Tell them you saw
their advertisement
in The Rural Voice.
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