Expert discusses how producers may benefit from these agreements
By Kaitlynn Anderson
Farms.com, July 11, 2018
Producers who want to rent land for extended periods may want to consider long-term leases.
Farmers may enter into these agreements if they want to rent properties for more than two years. However, these leases typically last for four or five years, Nathan Kolomaya, a lawyer at Brimage Law Group in Simcoe, Ont., told Farms.com today. Producers and landowners can enter into agreements that exceed five years but those cases are less common.
Farmers may sign these leases for many reasons. For example, they may deal with long-term crops, like ginseng, which require multiple years to grow before harvest, he said.
These agreements can also provide producers with more certainty than short-term leases.
“Farmers in long-term leases have the security they need to plan for their crops for many years and run their businesses smoothly,” Kolomaya said.
By finding land to rent for multiple years, producers can also commit fewer financial resources than they would need to purchase the land.
“If you want to have the highest level of security, then you buy the property,” he said. “However, when you make that purchase, you commit a lot of capital. You may tie up financing that you could’ve used elsewhere.”
Read the full article here.