We’ve all heard the term “drive it like a rental” but could that also apply to farmland? Is a farmer more likely to use conservation practices like no-till or variable rate technology, or apply more fertilizer and/or manure to improve the fertility on land he or she owns than on rented land?
In April 2013, Dr. Brady Deaton, Karthik Nadella, and Alfons Weersink of the University of Guelph, together with Chad Lawley of the University of Manitoba surveyed a random sample of 810 farmers in southwestern Ontario and Manitoba to try and understand whether tenure status, production practices, technology and other factors influence the way farmers treat rented and owned land.
Survey participants were answered questions about their type of land rental agreement, crop rotation, tillage practices, use of cover crops, manure applications and use of variable rate input applicators on land they own and rent.
Fixed cash contracts are the most prevalent form of rental agreements among farmers surveyed, although most in southwest Ontario are oral contracts, while in Manitoba, 47 per cent had written contracts. Only a very small number of contracts had any stipulations from the landlord about specific management practices expected of the tenant. Of those that did, type of tillage practice a renter could use was the most common.
Fifty-three per cent of these farmers perceived that some farmers take better care of the land they own than comparable land they rent. A majority agreed that farmers would use more manure or fertilizer and complex crop rotations on land they own rather than land they rent.
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What stood out from the study data is the significant difference in manure applications, with 31 per cent of farmers applying manure on rented land compared to 53 per cent on owned land. Farmers were also more likely to use cover crops on owned than rented land (18 per cent to 26 per cent).
“Research shows that most leases are one year in length, they’re handshake agreements, and they’re ‘what will you pay me?’” says Bruce Kelly, program manager with Farm & Food Care Ontario. “Everything else in agriculture is long term. In Ontario we have a lot of livestock, and the application of manure is considered a multi-year investment in nutrients but why would a farmer put any more fertilizer on than he needs to when another farmer down the road might outbid him next year?”
Conservation practices move with farmers
The study also showed that there were not significant differences in farmers using minimum or no-till and precision agriculture on rented and owned land. This makes sense given the fact that farmers who have already this equipment are going to use it on all the land they farm. It also makes their investment in no-till, precision seeding or variable rate technology more economical by spreading the capital cost over more acres.
But, Deaton cautioned in a recent interview, the reasons that farmers use certain management practices are highly nuanced, and there are a number of other complex factors that are not brought out in this study, and which require further research to understand.
“Our results wouldn’t justify a broad sweeping generalization like ‘farmers treat owned land better than rented land’ because it’s more nuanced than that,” Deaton says. “We found some differences that depend on the type of conservation action that you’re looking at. There are a lot of reasons and situations where they would or they wouldn’t do that. It could depend on the length and return associated with the investment.”
It’s important to note that 39 per cent of farmers disagreed with the notion that farmers treat rented and owned land differently, and cited maintaining their reputation in the community, taking care of the environment and meeting the requirements of the rental contract as reasons why.
Security is an issue
So, if some farmers are more inclined to treat their own land better than rented land, what are the reasons? No. 1 seems to be lack of security. Seventy-three per cent of the farmers surveyed said having a secure rental contract for the following year was the biggest factor in how they would treat rented land.
“Many farmers don’t have any stability when they rent because landowners are not willing to rent for more than one year at a time in case someone comes along and offers them more rent,” says Larry Davis, who grows soybeans, corn, wheat and hay near Burford, Ontario and speaks from experience. He lost land he had been renting to a vegetable farmer who offered the landowner three or four times the rent he was able to pay. The kicker is, the landowner came back to Davis a few years later asking him to rent the badly abused land again, when he couldn’t find another renter. “There were washouts 15 feet wide and six feet deep through that farm,” he says. Davis finally agreed to repair the washouts and farm the land rent-free until he brought back the soil health and productivity, which took several years. “This happens quite often,” says Davis. “I like to maintain good soil structure, so after a farm has been destroyed a bit, the landowners call me.”
Farmers have little incentive to use expensive inputs or fertilizers on land they can only rent year by year, adds Davis. “I put lime on another farm that I rented and when I went to work it the next year, the farmer told me he had rented it to somebody else,” he says. “There went $7,000 worth of lime and I had no way to get that back.”
Davis, at 66, has seen just about every situation when it comes to renting land, but says helping to educate landowners about the value of having a renter who is taking good care of the land pays off in the long run. In one case, Davis began renting land from a retired farmer, who was so impressed with the way he managed the land and his commitment to building better soil health, that he turned down higher rental offers to keep Davis doing what he is doing.
Sharing the crop is another approach that Davis likes to use, and which, he says, benefits everyone in the end. “If I grow a crop, I’ll try to get the landowner to take 25 per cent of the value of the crop when I harvest it, or 30 per cent if I can put on things like manure and biosolids,” he says. “That means they also share some of the risk, and it teaches them a responsibility to watch the land and make sure that I farm it right. It’s beneficial for both parties to make sure that land stays productive for the long term.”
The concern over maintaining soil health is prompting other innovative and collaborative approaches too, especially in Ontario, which is losing 175 acres of farmland a day to development.
Some vegetable growers are partnering with corn and soybean growers so that they can rotate their crops. “You have the landowner, and you have the person renting it, but every other year he’s renting it to somebody else, but that maintains a healthy crop rotation,” says Davis. “The corn or soybean crop can make use of the nutrients that have been put down for the vegetable crops because they sometimes aren’t all used, and no nutrients are wasted.”