Land rent and BTO versa the little guy.

have been reading the threads about this and here is my story and take on this. I have a say in 1/6 of the family farm. I am one of two that still live near the ground. The rest live all over the US. The buildings and house were sold 20 some years ago. Their is 100 acre with about 95 tillable in one location but your typical NJ 3 to 16 acre fields. Every couple of years some BTO offer some attractive rent for it. Which always starts the family discussion on collecting rent or giving it rent free to the little guy. We are on our third little guy rent free for some thirty years now. The first 2 pasted of old age or retired. Some of the family sees the big money dangling under their nose. I have to fight to keep the little rent free guy. And this is why. Like we have discussed here that some big and small guy do not put back what they take out of the dirt. The other thing is this that some have never brought up. If this farm was not farmed the taxes would be $ 4000 to $6000 a year. The first year the BTO drops you (when corn prices drop) you would lose your farm land assement and have to pay roll back taxes of 3 years or so. That could get too 30 or 40 K pretty quick. The right little guy maintains the fields and hedge rows and roads and has even brought a track hoe in to remove a coupe of mammoth rocks that every one has gone around for the last hundred years. I think when a farmer is going to or has to cut back on ground I doubt the rent free ground will be the first to be cut back. So in my mind getting rent or big rent is not always a good thing. The savings from land taxes is also a Irs tax savings also. So am I nuts to keep fighting for the little guy every couple of years or let most of the family have it their way and hope for the best that we do not lose the farm land exemptions.

(reply to post at 02:56:21 04/14/12)

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Thing here is subsidies...... followed by laziness, lieing and/or ignorance....

Normal farmer gets about 180 bucks a year per acre in welfare... An organic farmer gets twice that. I "could" get about 80 an acre if I was to sell my soul and follow a bunch of tree hugger rules.

So,
then comes the laziness/ignorance... Joe blow has XXXX acres of mixed property, retires and wants to rent it out. Doesn't want the hassle of several tenants so nabs the first BTO that comes along. He puts it all in his 180 buck pot then splits it between programs.... Owner or anyone else can nolonger touch ANY of the land now. Fruit and grass goes to waste because BTO didn't want to fool with it and put it in a nature program (and gets paid good) that says everything has to lay... Grass has to me cut/mulched once a year but can't be picked up.... Organic farmers are worse and programs are longer.... Guy like me or you can't afford to compete because land that is worth 60 euro cents a sq meter ( 5000 +/- bucks an acre) has the BTO's offering big bucks to buy/rent it.......

I think your doing the right thing! Helping the smaller family farmer. You are getting paid by the tax savings and the by keeping the farm land tilled and cared for. If you want to get pass the free, charge a $1. I have kids that are trying to farm and I help them as much as possible so we can eat our local food grown here in the U.S. Thanks for your part in saving our farms.

Seems like there should be a "happy medium"- You obviously can't change the deal in mid-stream with the guy you have now, but when it comes time to find another, I'd think you could find a little guy who would rent for, say, half the going rate, on condition he keep the place up, etc.

As far as losing Ag land taxation, I can't say what the rules are in your state, but at least here, they don't swoop in and jerk ag status if you have a year without farming it. I'm assuming there's enough demand for rental land that even if corn prices tanked, or your guy went broke and quit farming, you'd be able to re-rent it at your bargain price.

If I understand right you are getting no rent on the ground??? If that is right then you are getting taken for a ride. It makes no difference who the farmer is.

You need to find out what the common rental rates are in your area. Let just say $100 per acre. If you want to give the smaller guy a break then just ask for $75 dollars an acre.

Another way that would be a break for the smaller guy is a crop share deal. We used to give 25% of the corn crop and 33% of a bean crop. That was just for the ground. The land owner provided any lime all the other inputs where the growers. So if you want to give the little guy a break then just asked for 20% of either crop.

Why would the rest of the family want a non performing investment?? The land has value so it is money invested for everyone involved. Even if the sentimental value is high it needs to make some return or the other family members will be more likely to want to sell it. Your not doing yourself or your family any favors just giving away income to a stranger. If the farmer can't pay just a little rent then he is not going to make it anyway. Plus with crop prices what they are now then he has to be making money on the ground. If he is not then he is not a serious farmer just a hobby guy. If this is the case then let him pay for his own hobby.

You are lucky that some of your siblings have not really pushed the issue. You are only a 1/6th owner. No court in the land would let you stop the others from selling unless the land is in a trust. It could be easily be sold and you would get your 1/6 th share and they would walk away.

Around here that 100 acres would bring $8000-10000 per acre. That is $800k-$1m. Split that six ways and we are talking some serious money. If you keep pushing for the no rent deal I am willing to bet that you will be out voted real soon. I am amazed that they have not done it already. I know my siblings would not have let me put that for long.

I agree, you are getting taken.

I agree with you in principle, but I hope you don't actually mean _zero_ rent, just less than top stupid dollar?

A modist, sustainable rent from a modest sized, local farmer will probably keep your land in good shape.

If you have the tax abatement deal, likely you are located in a developmental area, and someday when the ecconomy picks up your farm will be sold by the square foot for mega-bucks and be concreted over, so kinda sad to be saving it as good farmland, but that's where my heart would be as well.

Free rent tho, that doesn't really work out well. Should be getting something, but your fears of that 'top dollar chasing' are well founded.

Around here you 'hear rumors' of outsiders paying $300-400 an acre rent, average rent for great ground is $200-250, poor land is $150. A good deal for the little guy 'here' would be to get poor ground for $125, or great ground for $150-175.

Nothing is free.

--->Paul

I was going to stay out of this but I see some posts from midwest farmers here that apparently dont understand farming in the northeast. Lots of farms that have gone out with little developement going on lately. Here in central ny fields are small, often wet (especially in the spring and fall) and often very stoney. we have a short growing season in many areas too. Much is classified highly erodable. Crop rotation is required to participate in any USDA programs (2 yrs row crop max, 3 yrs hay min) I rent 3 small farms near my own. Each has about 30 acres of usable crop ground. One I get for free. One I give 700 total for the crop ground, pasture, and use of the barn. The last one has some corn base acres and I hand the money to the landowner, he doesnt even ask for it. I get some very economical land, they get a property tax reduction and someone who takes care of their land. Everyone seems happy.

He said the land is in New Jersey so as to land price add quite a few more zero's to the valve. Your $8000 per acre is more like $80,000 per acre.What little land that is left is usually sold by the square foot not acre.Totaly different world than the midwest(and I hope it stays back there as well).

What is the going price of land, and is it grain land or marginal hay/cattle pasture? How much rent are you being offered?

To add more to this thread for this year I think it will be 60 acre corn 35 mixed grass hay. The day the ink on the paper work dried on the forms from my mother gifting it to us over the last 30 years. But it was at the tail end of the building boom. Two siblings who are retired wanted to sell it. One has always had a hole in her pocket wants any money asap. The fourth could sell or not. Myself and the 6th do not. I will sell if the price is right only so the older siblings can enjoy their gift in their retirement while they can. I will take my share and buy a small farm in PA to play on for my retirement like Larry @ stine corner does. This town is 13 some square miles. When I was a kid it had 50 some dairy farms in it in the early sixties. Now there are know dairies left at all. No full time farmers left. 3 may be 4 small guys part time with off farm full time jobs and then the other 3 or 4 guys that will never amount to any thing between bar rooms and big talk and no solid work. The rest of the full time farmers would have at least a 20 mile ride from any place to farm this ground. This farm is two mile from I80 interchanges. When you get on I 80 east the first sign you see states NYC 52 miles. This town has more developments and ball fields then any thing else. So does this clear up my perspective on collecting rent or do you think I am still getting taken for a ride.

I would still think that the guy could pay you a little bit for the land use and not go broke. It might not be that much but any is better than what you are getting. Just $50 an acre on the corn ground would be $3000 to help with the taxes.

Unless it's really poor rocky cattle pasture and no one will rent it, I'd say you should be getting rent. (at least pay your taxes) No one is so kind as to let me farm land for free, but it's grain land. I let people cut hay for free on poor land. Some areas can fetch very high rent(over $100/ac) other areas only $25/ac. This is not in the USA, so take it with a grain of salt. Rent correlates with land values, and what you can produce on that land. Get the lowdown in your area is the best I can come up with for you.