Various agencies and organizations are promoting practices for soil conservation and ecosystem improvement. These efforts, intended to maintain or improve productivity of the land, often come with financial incentives. Long-term or short-term, these practices also can affect leases and relationships between landowners and tenants.
University of Missouri Extension specialists Ray Massey and Jacob Hefley recently created a publication to help landowners and tenants discuss conservation practices. The publication, “Conservation Provisions in Leases,” is available for free download at https://extension.missouri.edu/publications/g421.
Landowners and tenants may implement practices for different reasons – ethics, long-term investment or profits. These practices can conflict with one another. Some practices, such as ponds, terracing and fencing, can be permanent; others, such as cover crops or crop residue, can be temporary. Costs vary, with shared risks and rewards perceived differently by both parties.
Incorporating conservation practices adds complexity to leasing arrangements, and negotiating terms can be time-consuming, says Hefley. Therefore, begin conversations well in advance of the lease renewal to allow enough time to find common ground and incorporate changes into a written document.
When the lease is negotiated properly, the owner and the tenant should see the costs and benefits as fair. These include rent cost and lease length; cost-sharing; depreciation of practices such as fencing, terraces and waterways; and much more.
Hefley and Massey recommend a four-step approach to maintaining smooth relationships:
1. Understand the objective. Conservation practices can be for a specific purpose for a specific period. Owners may see conservation practices as a way to improve their land. They may also have emotional ties to the land that affect decision-making. Tenants, on the other hand, may see these practices as something that cuts into profitability on land that they pay to rent.
2. Explore opportunities. Conservation opportunities are site-specific. There is no one-size-fits-all approach in well-planned opportunities. Landowners and tenants should consider each opportunity and different methods to achieve goals.
3. Communicate. Success comes with a clear but flexible plan that recognizes both parties’ objectives and needs. Hefley recommends starting a conversation to gain insight into the other party’s objectives. “Communication may involve the landowner pointing out what the tenant is doing on another field and asking their experience. The conservation can move towards discussing whether it would be appropriate for the leased field,” he says.
4. Document the plan. Include an addendum to the lease that outlines conservation activities, time frames and each party’s roles and responsibilities. As always, leases should be written and include an exit strategy in the event of death of one of the parties or other factors.
The publication also gives resources to learn more as well as a list of frequently asked questions to guide conversations.
