Custom Farming Agreement Form
Below, the average agricultural customs fees for 2008, based on the Iowa Farm Custom Rate Survey (including soil, planting and harvesting costs): An obvious benefit to the custom operator is that a customized agriculture contract offers additional farm income, with little or no additional working capital or investments in farm machinery. Fuel, laying and repairs are usually the only additional cost. In addition, custom farming offers a fixed yield per hectare to the custom operator and, although there is some possibility of higher repair bills, it is low compared to the price and yield risks to which an operator is generally exposed in a normal cash lease. Of course, in a good year, the benefits of a customs contract will be less than most leases; However, in this period of much higher land rents, the risk to the operator of a barleasing is much higher than in the case of a customs agreement with a landowner. An alternative to renting arable land is an agricultural agreement subject to tariffs. In a typically customized farming contract, the custom operator undertakes to carry out all machine operations on the owner`s land for a fixed fee or a specified rate. The landowner pays for all costs of seeds, fertilizers, chemicals, harvesting and other inputs; receives all cereals produced and all eligible payments for rural agricultural programs; and is responsible for the storage and marketing of cereals. For more information on custom agricultural agreements and other information about agricultural machinery, visit the Website of Iowa State University”Ag Decision Maker. There are a few points that need to be taken into account in customs contracts: landowners also benefit from certain advantages of a tariff exploitation contract. Small-scale landowners can make most of the decision on plant production and grain marketing without investing in a complete set of agricultural machinery. The landowner is not required to negotiate land rental prices or to worry about rent recovery, as the owner receives the entire crop. The landowner must pay the operator an agreed fee per hectare for the management of the farm on specific dates. The landowner is considered an essential participant in income tax and is generally entitled to all payments made under the national agricultural program.
Key issues with custom farming agreements: Although the concept of a custom farming contract is simple, close communication between the custom operator and the landowner is essential. A written contract should be established for the contract, which sets the amount of the owner`s payment to the customs operator and all other relevant information. · Corn – $94.10/Acre ($55-130 range) Soybeans – $83/acre ($54-110 range) Small grain – $78/Acre ($68-90 range).
