What Is Fair Reimbursement For Destroying Tenant's Hay Seeding On CRP Land?

What Is Fair Reimbursement For Destroying Tenant's Hay Seeding On CRP Land?

Landlord recently bid 80 acre field of newly-seeded alfalfa into CRP program. CRP requires the 80 acres be planted to native prairie grass. Thus, the new hay seeding the tenant planted this past spring has to be destroyed.

FAQ: I manage a farm that previously belonged to my father. We were recently approved by USDA to put 80 acres into the Conservation Reserve Program or CRP. I rent the land to a farmer. He planted hay in spring 2010 without realizing the CRP program would be available for a general signup this year. He has put $4,000 in seed and fertilizer into the 80 acres.

He was able to get one cutting of oats this year from the new seeding—and that was it. Unfortunately, we will have to kill the hay with Roundup herbicide before we can plant the native prairie grass this coming spring to seed the land down for CRP. The farmer and I are unsure how to figure out what amount would be fair to pay him for destroying his hay crop. Do you have any suggestions?

Answer: Provided by Steve Johnson, Iowa State University Extension farm management specialist in central Iowa.

Sorry to hear about this issue. I'm assuming there was not a signed list where the reimbursement for costs is stipulated. Also, was the lease terminated on or before September 1, 2010? If not, the tenant has a right to farm the farm in 2011 with the same arrangements as in 2010.

Usually a commitment to grow hay is a multi-year (3 to 5 years minimum) agreement between the tenant and landowner. The landowner that was interested in enrolling the farm in CRP should have communicated this with the tenant before the decision to plant hay was made. There appears to be a lack of communication between both parties.

My recommendation, thinking win-win for both parties:

1) Landowner reimburses the tenant the $4,000 in exchange for terminating the farm lease,

2) Tenant keeps 100% of the oat crop harvested to help cover machinery, fuel and labor costs,

3)Landowner agrees to pay tenant custom rates for work completed on the farm as requested by the landowner using the latest ISU Extension Custom Rate Survey information. The link to the ISU survey is www.extension.iastate.edu/publications/fm1698.pdf

If you have specific questions or need details regarding USDA farm programs, contact your local USDA Farm Service Agency office. You can also get news and information about DCP, ACRE and other USDA programs at www.fsa.usda.gov.

Two Iowa State University Extension Web sites have farm program information and analysis. They are ISU's Ag Decision Maker site at www.extension.iastate.edu/agdm and ISU Extension Specialist Steve Johnson's site at www.extension.iastate.edu/polk/farmmanagement.htm.

And be sure to read the regular column "Frequently Asked Questions about the Farm Program" that appears in each issue of Wallaces Farmer magazine and at www.WallacesFarmer.com

 

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