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Adapting Crop Share Agreements for Sustainable and Organic Agriculture

File C2-31
Written January, 2006

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When the farming system deviates from a conventional corn-soybean rotation, the usual division of costs and returns in a 50-50 crop share lease may no longer fairly reflect the inputs of each party.

Approximately a quarter of the cropland leases in Iowa are crop share arrangements. This type of lease allows the landowner and tenant to share the risks and some of the management of the farming operation.

In the majority of crop share leases in Iowa, the landowner supplies the land; the tenant supplies the machinery, fuel, and labor; and landowner and tenant split 50-50 the purchased input costs such as seed, fertilizer and pesticides. Generally, the yield also is split 50-50, and each party stores and/or markets his or her portion separately and receives half of any government payments (which are usually allocated in the same proportion as the yield).

In conventional corn-soybean rotations, this arrangement provides a reasonably equitable division of costs, inputs, and returns, which is why it is so widespread. Table 1 shows typical inputs and costs for both the landowner and tenant in a conventional crop-share corn-soybean rotation.

Table 1. Divsion of costs in a conventional corn-soybean rotation (one acre)

 

William Edwards, retired economist. Questions?
Diane Mayerfeld, Center for Integrated Agricultural Systems, University of Wisconsin–Madison
Rick Exner, Practical Farmers of Iowa
Margaret Smith, ISU Extension