Farming

Farming is the use of land for agricultural processes to produce crops or tend animals to produce food. Farming land falls into multiple categories depending on the crop or species of animal that is cultivated there. This includes but is not limited to arable farms, vegetable farms, fruit farms, dairy, pig and poultry farms, and land used for the production of natural fires, biofuel and other commodities.

Characteristics of the Type of Land Needed

Land size and soil type are key determining factors in the viability of farming land. Other factors include climate and even whether or not crops are currently being grown there. Soil content is extremely important and will be a factor that determines the type of farming use for the land. The nutrient content, plant pathogen and pest population, probiotics, and soil tilth are some of the soil characteristics used to determine land could be used for agricultural purposes.

Growth and Potential of the Industry

The Agricultural industry accounts for $2 trillion dollars in revenue annually. The annual growth rate from 2011 to 2016 was .5%. In 2015, the American agricultural industry produced and exported $133.1 billion dollars of agricultural products. The U.S. exports more food and fiber than we import.

Industry Terms

Control rights: A right to manage the property being leased. It might include the rights to decision-making about the land’s use including the types of crops that can be planted, and to benefit financially from the sales of crops.

Crop-Share Lease: A lease arrangement in which the landowner gets a share of the crop in return for contributing a piece of land for the farming operation.

Custom Farming: An agreement whereby a farm operator agrees to perform all the machine operations on an owner’s land in exchange for a fee or rate. Seed, chemicals, and other inputs are paid by the landowner who retains all of the crop and commodity payments.

Emblements (Doctrine of): Provides a tenant the right to enter property in order to care for and harvest a crop after the lease is terminated. This right is usually granted when the tenant has planted the crop before receiving notice of termination.

Bargain Purchase Option: An option established at lease inception allowing the lessee to purchase the equipment at the end of the lease term at a price that is fixed sufficiently below the expected fair value, so that purchase appears to be reasonably assured.

Harvest Pay: This allows agriculture producer lessees to acquire equipment when they need it (during production) and delay payments until they have the cash (after harvest). Lessees can choose to delay the first level lease payment up to six months. Additional payments then follow at annual or semi-annual intervals, making it possible for lessees to continue matching equipment payments to their cash flows.