The following is a tentative contract. This is just a standard farming contract contract, slightly adapted to the situation of farming or gardening Organic and Sustainable Vegetables. The only thing original in it is that it limits share-cropping “rent” due to landlord to a maximum percentage of the fair agricultural value of the land rented. This is due to the fact that the high profitability of the crop could create ridiculous and unfair situations where Landlord's share cropping share would some years be equal or superior to what would be reasonable, possibly exceeding the entire fair value of the land provided, which obviously makes no sense, since this would create an unstable situation where tenants' reasonable choice would be to rent or buy adjacent land for cash at the end of the first crop, forbidding any medium and long-term approach to land management, and forcing costly and inconvenient moving.
The complete document in .pdf format can be downloaded from:
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FARM LEASE AGREEMENT
1. PARTIES TO THE PRESENT COVENANT: This lease is entered into on , 20 , between
Landlord and owner of premises:
whose principal address of business is , , for the property located at
and commonly known as
and the Trustees of the Optimal Gardens Trust, Tenant, represented hereby by
2. DESCRIPTION OF PROPERTY HEREBY RENTED: The Landlord rents and leases to the Tenants, to occupy and to use for agricultural purposes, the following real estate located in the Citty of (if any)
in the County of , State of , legally described and commonly known as
consisting of an approximate surface of acre(s), plus any additional other areas as maybe designated from time to time by common agreement between the parties.
3. TERM OF THE LEASE: The term of this lease agreement shall be in effect for the period commencing on , 20 , and ending December 31st, 20 , and shall continue in effect from year to year thereafter (as an annual lease) unless written notice of termination is given by either party to the other at least 180 days prior to expiration of this lease or the end of any year of continuation.
4. RENT PAYABLE: The annual rent shall be a percentage of the crop in the following agreed percentages: Landlord – 25% Tenants – 75%. Any needed crop inputs, in addition of the basics provided by Landlord, such as land, buildings if any, water, etc, will be shared on the same agreed percentage as the crop.
Conversely and at Landlord's choice, Landlord's share might be reduced to 20%, all crop inputs becoming responsibility of Tenant.
In any event, the amount of Landlord's share of this sharecropping agreement shall not exceed for each acre more than % ( per cent) of the value of said acre for agricultural purposes (excluding any speculative value tied to proximity to a city, the potential for construction permits, etc), which for the purpose of this contract the parties agree to be of $ ( dollars) per acre effectively used by tenant. Crop share can be delivered as crop on Landlord's request, but only IF the parties can agree on a valuation of said crop. Otherwise, crop will be sold wholesale by Tenant, and the corresponding net proceeds after sale expenses paid to Landlord.
5. STANDARD GENERAL CLAUSES:
Most favored partners: In the case Landlord or Tenants desire to participate in the marketing of their respec-tive products, such for example as vegetables or as nutritional products produced under this tenancy, each party will offer its products or services to the other party under the most favorable conditions made available to any other distributor or partner.
No Partnership Intended — However, it is particularly understood and agreed that this lease shall not be deemed to be nor intended to give rise to a partnership relation.
Binding on Heirs — This Lease shall be binding upon the Landlord and Tenants and their respective personal representatives, trustees, successors, assigns, lessees or sub-lessees.
Landlord liability — Landlord shall have no liability: Tenants takes possession of the leased premises subject to the hazards of operating a farm, and assumes all risk of accidents personally as well as for family, employees, or agents in pursuance of farming operations, or in performing repairs on buildings, fences, tile, and other improvements except as set by law for any liability arising out of the “gross negligence” of the Landlord.
6. USE OF THE LAND - Tenants further agrees to perform and carry out the stipulations below:
The purpose of Tenancy is to grow agricultural crop directly as well as indirectly, by allowing sub-lessees of Tenant's choice to do the same, while providing adequate facilities and amenities to all stakeholders to do so. Tenants shall make all decisions with respect to growing of crops on the land unless stated otherwise in this agreement or any other subsequent agreement. As for the present time, the main purpose of Tenancy is to grow Moringa trees and herbs for sale on the marketplace. If this changes substantially, Tenant will inform Landlord of new developments.
Condition of Land at the end of the lease — The Tenants agrees to leave the rented land in the same or a better condition as at it was at the beginning of the lease.
Good Stewardship — To cultivate the leased premises faithfully and in a timely, thorough, and business-like manner and in accordance with normal farm practices.
Soil Erosion — To control soil erosion as completely as reasonably possible; keep in good repair all terraces, open ditches, inlets and outlets of tile drains; preserve all established watercourses or ditches including grassed waterways; and refrain from any operation or practice that will injure such structures.
Repairs — To keep Landlord's fences and other improvements in as good repair and condition as they are when the Tenants takes possession or in as good repair and condition as they may be put by the Landlord during the term of the lease, ordinary wear, loss by fire, or unavoidable destruction excepted.
7. ACTIVITIES RESTRICTED: The Tenants further agrees, unless the written consent of the Landlord has been obtained:
No Alterations — Not to remove, alter or change the style or position of any existing building or fence on the said leased premises
Limitation of Landlord's Liability: Tenant or Tenants partners or associates will mainly use this property for purposes and activities directly or indirectly related to agricultural production, the transformation, marketing and promotion of agricultural or related products into foods, beverages, nutritional, nutraceutical and/or cosmetic products or services directly by or in partnership with and under the responsibility of Tenant, the use and promotion of use of agricultural, nutritional, nutraceutical or cosmetic products, or the promotion of their use. Regardless of any such developments, Landlord is hereby being released of any and all possible liabilities relating to Tenants activities.
Amendments and Alterations — Amendments and alterations to this lease shall be in writing and shall be signed by both the Landlord and Tenant.
8. ENVIRONMENTAL MATTERS - The parties hereto hereby acknowledge that the Tenants intends to use the leased premises described in this lease for agricultural purposes and that such use of the land may have an environmental impact; accordingly, the parties agree as follows:
Use of Normal Farm Practices — The Tenants shall conduct its operations on the leased premises in accordance with normal farm practices including, but not limited to, the application of fertilizers, pesticides and herbicides and shall only engage licensed applicators of such substances or shall ensure that the persons doing so are appropriately licensed for such applications.
Manure and Nutrients — To haul, process and spread manure to be used on appropriate fields at times and in quantities consistent with sound manure management practices, and for the activity of creating natural and bio-dynamic composts for both for-profit and not-for-profit activities.
Noise — The Tenants shall ensure that no undue noise or other nuisance emanates from the leased premises or from the operations of the Tenants on the leased premises, at a level not permitted by local regulations.
9. TERMINATION OF LEASE: Grounds for Termination of Lease — If either party fails to carry out substantially the terms of this lease in due and proper time, the lease may be terminated by the other party by serving a written notice citing the instance(s) of default and specifying a termination date of number of days from the date of such notice. Settlement shall then be made in accordance with the standard provisions under the Right of Inspection and Removal of Crops section of this lease and any amendments to this lease.
Tenant’s Compensation on Termination of Lease — The Landlord agrees to reimburse the Tenants at the termination of this lease for field work done and for other crop costs incurred for crops to be harvested during the following year. Unless otherwise agreed, current custom rates for the operations involved will be used as a basis of settlement. In particular, all trees and seedlings of the Moringa species and products and all their parts or by-products shall remain the property of Tenants and be removed by them, subject to compensation to Landlord hereby agreed upon. Landlord hereby represents that for five (5) years after termination of this lease, Landlord or family members and associate(s) will not engage in the cultivation, transformation or marketing of Organic and Sustainable Vegetables or Fruits or other specialty crops promoted by Tenant, or of any related products or services.
Tenants shall, at the expiration of the notice period, peaceably and quietly give up possession of the leased premises to Landlord. Landlord shall, after Tenants have delivered up possession in manner aforesaid, and paid to the Landlord the full proportion of rent up to the beginning of the notice period will compensate all Tenants for the value of the crops sown and then growing, or of the field work done on the leased premises in preparing for a crop, the amount of such compensation to be determined by arbitration if the parties cannot agree thereon.
10. RESOLVING DIFFERENCES: Disagreements Will Be Submitted to an Arbitrator.
Any differences between the parties as to their several rights or obligations under this lease and to the affairs of the leased premises that are not settled by mutual agreement after thorough discussion, shall be referred to the arbitration of a single arbitrator, if the parties hereto agree upon one; otherwise to three arbitrators, one to be appointed by each party and a third to be chosen by the first two named before they enter upon the business of arbitration. The award and determination of such arbitrator or arbitrators, or any two of such three arbitrators, shall be binding upon the parties hereto and their respective heirs, executors, administrators and assigns.
Made in , State of , this Day of 20 .
Landlord Tenant
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Appendix A — Crop Share Worksheet
[ The Blog does not allow to publish these tables as tables. For see the actual tables, please download the whole document in .pdf format from ]
Table 1. Blank Crop Share Worksheet
Section A — Landlord Investment
Total Value
Rate (%) or Life (Yrs)
Total Amount
Per Acre Charge
Tenant Share
Landlord Share
Line
Surface - Number of Acres
A Value of Land (exclude perso-nal & non-agri considerations) & Investment Interest Rate (value x rate = per acre charge) $ % $ B
Property Tax Per Year on Agri value (optional Calculation using % of investment)
B Value of Land Improvements/acre & the Life Span $ yrs $ $ $
Value of Landlords Equipment Used $
C Depreciation or Appreciation yrs $ $
Average Interest % $ $
Other Expenses $
Total $ $ $ $
D Section B — Tenant or Landlord Crop Revenue
Crop 1
Crop 2
Crop 3
Combined
Tenant Share
Landlord Share
Line
Acreage
E Expected Yield per acre
F Price per pound, ton or bushel (or other unit) $ $ $ $
G Total Expected Yield (LINE E x F)
H Gross Crop Revenue (LINE G x H) $ $ $ $ $ $
I Government Payments if any $ $ $ $ $ $
J Total Revenues Per Acre (LINES I + J) / E $ $ $ $ $ $
K Section C — Tenant or Landlord Crop Expenses (Do not record the expen-ses shared in col. 2 & 3)
Crop 1
Crop 2
Crop 3
Weighted Average
Tenant Share
Landlord Share
Line
Seed
Natural Fertilizers
Natural Amendments
Natural Insecticide
Machinery Fuel
Machinery Repairs and Maintenance
Crop Insurance
Marketing Fees
Drying
Custom Work
Trucking
Storage
Consulting and hired labor
Operating Interest
Other Expenses
Other Expenses ( Land Improvements)
Total Variable Expenses P
Total Variable Crop Expenses
Fixed Expenses
Total Value
Rate (%) or Life (Yrs)
Total Amount
Per Acre Charge
Tenant Share
Landlord Share
Line
Value of Tenant Equipment
L Total Acres Cropped by Tenant
M Investment per Acre Allocated to this Crop (A/M x L) $
N Depreciation (rate x LINE N) Yrs. $ $ $
Average Interest (rate x LINE N)
Insurance (rate x LINE N) 0.25%
Total Fixed Costs
O Labor and Management
Labor Charge (hours per acre x rate per acre) 0.5 Hrs/ac @
Management Charge (rate x (land value per acre + LINE N) 0.5% Of total investment
Total Cropping Expenses (excluding investments expense)
All Costs Including All Investment Costs A
Q PERCENT CROP SHARE (LINE Q landlord or tenant / LINE Q col. 2 and 3)
R SECTION D — Tenant or Landlord Net Income or Crop Share Percentage
Cash Rental
Per Acre
Total
Crop Revenue per Acre (LINE K) $ $
Total Crop Expenses (exclude. Section A) (LINE P) $ $
NET INCOME PER ACRE (LINE S-T) $ $
Landlords Required Income (LINE D) $ $
Tenants Net Income after Landlords Required (LINE U-V) $ $
Line S T U V
Crop Share
Landlord
Tenant
Per Acre
Total
Per Acre
Total
Line
Total Expenses to be Shared (Line Q: col. 1 minus (col. 2+3)) $ $ $ $
W Percentage Share (Line R – Landlord or tenant) % %
Revenue (Line S x Line R – landlord or tenant) $ $ $ $
X Landlord & Tenants portion of shared of expenses (Line R x W) $ $ $ $
Y Cash Cropping Expenses (excludes investment and depreciation) $ $ $ $
Z Cash Income from Crop Share (after shared expenses) (Line X-Z) $ $ $ $
Total Expenses including land and machinery investment (Y+Q) $ $ $ $
AA Net Income (after all expenses include investment costs) (Lines X – AA) $ $ $ $
Cost per acre is calculated by multiplying, or dividing, the total or per-acre value by rate or life.
Land value — Land is valued at its current fair-market value for agricultural purposes. The influence of location near cities and other non-agricultural influences on value is ignored.
Interest on land — A practical "bargaining" rate of interest tends to be 4%–7%.
Property taxes — The actual taxes due annually should be used, on the part of the land value that is agricultural value, not value related to other consideration (land speculation, proximity to cities, etc).
Land improvements — The average dollars spent annually for lime, conservation practices, and other land improvements should be used.
Crop machinery — The value of machinery should be the average value of a good line of machinery necessary to farm in the area. The value should not be the cost of a new line of machinery.
Machinery depreciation — Depreciation can be calculated using the average years of life for the equipment. An average for a typical farm might be 5 to 7 years.
Interest charge should be computed on "average" investment in crop machinery.
Machinery repairs, taxes, and insurance — Farm records indicate repairs are 5%–8% of the original machinery value. The charge for taxes and insurance should be from 0.25%–1%.
Machinery interest — The current interest costs on the average machinery value (usually one-half the original value if this is old equipment) should be used.
Labor — Labour can be contributed solely by the tenant or by both the tenant and landlord.
Note: Average custom rates for tillage, planting, and harvesting operations can be used to estimate the annual charges for machinery and labor. Placing a value on labor is a bargaining process between the parties entering the leasing arrangement. A guide for estimating the value of labor is the going wage rate paid to farm employees within the community. Most farm operators are certainly worth more than the value of an average employee because of their management, but management is valued separately from labor.
Management — The function of management may or may not be shared. If the landlord contributes to management, credit needs to be given. If the tenant bears all management responsibility, place a value on this management function. The value of management is largely a result of bargaining between the landlord and tenant. Two alternatives are possible:
A possible guide is 1%–2.5% of the average capital managed in the business. The average capital managed is equal to the market value of the land and value of machinery.
Professional farm managers commonly charge 5%–10% of adjusted gross receipts. (In the case of crop production, gross receipts equal total crop receipts.)
Either procedure will provide an estimated value for management. However, a value equal to 1%–2.5% of average capital managed is a more stable figure than a percentage of gross receipts because prices and yields for commodities vary greatly from year to year.
Custom Work — Harvesting, hauling, spreading fertilizer, and other operations are often custom-hired. These charges can be entered in the worksheet. Note: If custom hiring is done, the crop machinery investment should be adjusted, as less machinery investment is needed when custom work is part of the operation.
Harvesting and hauling cost may be included in crop machinery and fuel-oil expenses.
Total Crop Costs will probably not represent the total costs of both parties. In the example, values for such inputs as fertilizer, herbicide, and insecticide, or their equivalent in organic agriculture (soil amendment, treatments, etc) were not listed since these items were shared in the same percentage as the crop.
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Why enter in such agreements? Eating right, that is foods produced locally by yourself in your own backyard of in a Community Garden spot provided by the city or a local non-profit or obtained through a barter arrangement, or by people you know and trust in a CSA (Consumer Supported Agriculture) or similar arrangement has the potential to change the world, and certainly *your* world : It will impact your health in a positive way very significantly, as well as impact public health, adding years to your life and life to your years. You *want* to be involved. Crop-sharing agreements can be the way to go!
Lots of How To data can be found on this website, and everything you find there can be re-used by your under the conditions specified in the copyright notice and license grant notice. The standard notice reads as follows:
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