Custom Farming Agreement Form
Below are some things to consider for custom farm agreements: For more information about custom farm agreements and other information about farm machinery, check out Iowa State University`s “Ag Decision Maker” site. Landowners also find several benefits from a client-specific agricultural agreement. Smallholder landowners can make most decisions regarding crop production and grain marketing without having to invest in a full range of agricultural machinery. The landowner is not required to negotiate rental prices or take care of the collection of rents, since the owner receives the entire harvest. The landowner must pay the farmer an agreed fee per hectare for customer-specific agricultural services on specific dates. The landowner is considered an essential participant in income tax and is generally entitled to all payments from state agricultural programs. Main problems with customer-specific agricultural agreements: Although the concept of a personalised agricultural agreement is simple, close communication between the customs operator and the land owner is essential. A written contract should be drawn up for the agreement indicating the amount of payment from the landowner to the customs operator and all other relevant details. The obvious advantage for the customs operator is that a customized farm contract offers additional farm income with little or no additional working capital or investments in farm machinery. Fuel, lubrication and repairs are usually the only additional costs. In addition, Custom Farming offers the Custom Operator a fixed return per acre, and while there is some possibility of increasing repair bills, it is low compared to the price and yield risks a farmer typically faces in a normal cash lease agreement. Of course, in a good year, the benefits of a custom farm contract will be lower than those of most cash leases; However, during this period of much higher land use, the risk to the farmer with a cash lease is much higher than a personalized agreement with a landowner.
Average farm costs for 2008 are listed below, based on the Iowa Farm Customer Rate Survey (including tillage, planting, and harvesting costs): an alternative to renting arable land is a custom agricultural agreement. In a typically personalised agricultural agreement, the tailor-made operator undertakes to carry out all machinery operations on the owner`s land, for a fixed fee or price. . . .
