The Missing Party In The Discussion About Sustainable Farming

The good news is that state-of-the art sustainable farming practices can pay for themselves. When fields are tended in a way that improves soil quality over time, there are multiple environmental benefits in terms of water quality, greenhouse gas emissions, and energy demand. At the same time, this kind of farming increases the value of land through increased productivity and greater drought resilience. The not so good news is that farmers rent much of the land they farm, so they don’t fully benefit from the financial up-side of this sort of sustainable farming. And typically, those that own the land are far removed from the details of farming. I believe that this disconnect and misalignment of financial incentives is a key barrier to the fuller implementation of the kind of farming that could meet both our environmental and food supply goals. Maybe You Can’t Buy The Farm, But You Can Rent It Rented land USDA map There are historical and logical reasons why so much farmland is rented. As mechanization steadily reduced the number of people needed to produce food, the descendants of previous farming families tended to retain ownership of the land even after they had migrated to cities. Those who continued to farm found that it is better to expand their operations by renting land rather than through buying. With the unpredictable ups and downs of commodity prices, a big mortgage puts a farmer at too much risk of bankruptcy. Also, the price of land can vary for many reasons unrelated to its potential crop production (development potential, mineral rights…), while land rents are very tightly connected with the likely crop value (see graphs below). Renting land also makes sense for the owners because it represents a steady stream of income. How land rents are related to potential productivity for 4 Midwestern states However, even though the leasing of farmland is a practical system, the way it is typically done today misses the opportunity for a win-win-win scenario for the farmer, the land owner, and the environment. There are different kinds of leases, but a widespread arrangement is a simple annual cash rent. The farmer pays a set price for each given year with no guarantee that they won’t be...

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