Not all farm land is owned by farmers.
Even though the farmers are the ones working all year long on the land, the farmer is not always the owner of the land. In many cases, investors, heirs of land, and retired farmers own land and it is leased to other farmers to use in different ways.
Some farmers rent land from owners.
While farming land that they own, farmers also will rent land from owners. These agreements can vary, but usually they consist of an agreed upon amount that the farmer will give the owner so that they have full rights to raise a crop on. For example, if an owner owns 80 acres of field prime for corn and soybeans, a row crop farmer will pay a set amount per acre to the owner. This varies by location, but for example we can use $300. Therefore, the farmer will pay $300 per acre of the 80 acre field, and will pay the land owner $24,000 to use the field for that year. This would just be like renting an apartment from a landlord for a set amount each month.
There are different types of land agreements beyond just renting the land.
While some agreements are farmers just renting land from an owner, other types of agreements exist where farmers and land owners make a prearranged schedule of payments on various inputs and the splitting of the output. For example, a land owner might want to split in half the costs and income from a farm. So if seed, chemical, and machinery costs $1,000 a year per acre, the farmer will pay $500 while the owner pays $500. At the end of the year, if the income is $2,000 per acre, the farmer and owner will both receive $1,000.
Owners can pick whoever they want to farm the land.
Owners can obviously choose whoever they want to farm their land. With this in mind, farmers make sure to take care of the land as best as possible. Farmers do not want to lose the bond and agreement with the land owners, so they take care of the land as best they can. This includes using current technologies to save soil and waste less water and nutrients on the fields. The better a farmer treats the land and the land owner, the better chance that they will keep the farm for years to come.
Being respectful to land owners pays off in the long run.
Over time, building a strong relationship with a land owner can be the best thing a farmer can do. A farmer can make sure to meet the land owner’s wants and needs at a fair price. In the long run, a farmer hopes it works out financially, creating a great business relationship that helps promote the strength of the farm. In some cases, the farmer may even be able to buy the land off of the original owner for a lower price that what would be sold to the public.
Overall, farmers and land owners can be compared to renting a house or apartment from a landlord. The stronger the relationship and the more understanding from each side helps the bond become strong and successful.