One of the biggest challenges facing farmers—especially beginning farmers—is access to land. A new online course by Land for Good called “Acquiring Your Farm” aims to teach beginning farmers how to go about purchasing their own land. It offers lessons about various topics including financial assessment, farmland ownership, and tips on communication and negotiation.
What’s the starting point? The course begins by talking about the basics of holding land. It mentions that land tenure can be divided into two categories: ownership and tenancy. Ownership means having the title to the land, while tenancy is leasing land from the owner.
The course overview suggests that it’s helpful for farmers who want to own their farm to be informed about ownership models, the sales process, and terms in order to examine their options and avoid common pitfalls.
Here in the United States, ownership is the most common form of land tenure. This holds true in many other countries. Private ownership gives the owner a bundle of rights, such as the right to till the soil, harvest trees, fish, or hunt. The limitations of ownership are defined in regulations, such as zoning, easements, or other use of eminent domain.
According to the content of this online course, farmers typically started on farms that their family, or someone in their own farming community, owned. Today many farmers need to be more creative in their search for farmland. The process of looking for a new farm can be broken into four steps: First, decide what to look for. Second, develop a research plan. Third, evaluate potential properties. Finally, decide and negotiate the transaction.
Challenges may come up in the search for land, such as high land prices, competition with other farmers, etc. How can one address these concerns? “Acquiring Your Farm” recommends that, to be successful, farmers should anticipate these challenges and prepare for them. A host of tips are provided for farmers seeking land–they are encouraged to prepare for the questions that landowners might ask, to promote themselves, to stay flexible, and to persevere.
When I reviewed the course, I noticed that the instructors advise that another option is to lease, or rent, land. A lease is a contract between a property owner and a property user that specifies the rights, limitations, and obligations of both the owner and the user. Farms can rent either whole farms or only the land. They can also rent buildings, machinery, livestock, and equipment as well. Two types of leases are short-term leases (annual to three to five years) and long-term leases (five years or longer).
While an interested farmer really should participate in this terrific course, here’s a quick recap of what I learned about leasing land. In a nutshell: Short-term and long-term leases each have their own advantages and disadvantages. For example, advantages of renting a farm short-term include lower costs than purchasing the farm, tax deductions for leasing costs, and the rights to terminate. However, the tenant cannot recover lease costs or benefit from appreciation in land value, and he or she has limited control over the land and improvements to be made to the land.
Long-term leases also offer certain advantages. As a tenant, a long-term lease would allow a “longer planning horizon for business and resource stewardship” as well as land security. But long-term tenancy does reduce net income without contributing to long-term accumulation of property of one’s own.
One great point I took from the course was that effective communication is vital to successful farm tenure. Relations between the buyer and seller–as well as landlord and tenant–can be improved if both work on their communication skills, approach communication with a positive attitude, and try to reduce any barriers to understanding. The course emphasizes that farmers need to communicate well. This includes not only spoken words, but also emails, written documents, and body language. If you are clear, thorough, and understanding, then you will help build the trust of the other person, which allows for a successful lease or purchase negotiation and a good working relationship with the other person for many years to come. The course shows how much farming relies on relationships, building trust, and being clear with others.
This thorough online course contains many valuable suggestions for beginning farmers seeking new farmland. Anybody interested in looking at the key issue of acquiring land can access this terrific resource by clicking here.