Department of Economics
An objective rental arrangement has two important advantages. First, the tenant could farm as intensely as his costs and prices indicate that he should. If he does a better-than-average job he receives all of the benefits. Second, because the amount of rent to be paid cannot be affected by the tenant's farming, the landlord is much less apt to seek a new tenant. Hence, the tenant's security or tenure may increase. A disadvantage is that the tenant bears more price and weather risks. Also if the tenant makes an error in management he alone bears the loss. However, the tenant paying an objective rental should not have to pay as much rent since the landlord no longer bears these risks. In view of these advantages and disadvantages, how many and what kind of tenants would be willing to use objective rental methods such as the cash or flexible cash lease?
long term farm leases, cash farm leases, short term farm leases
South Dakota Experiment Station, South Dakota State College of Agriculture and Mechanical Arts
Berry, R. L. and Bau, V. E., "Tenant Interest in Long-Term and Flexible Cash Leases" (1959). Research Bulletins of the South Dakota Agricultural Experiment Station (1887-2011). 480.