My brother wants to talk to a landlord about pattern-tiling 80 acres after harvest. He wants the landlord to help pay for it. I want to leave it alone and not risk losing the farm. If we approach him, what would be fair? Would you talk to him?
The Profit Planners panel includes David Erickson, farmer, Altona, Ill.; Mark Evans, Purdue University Extension educator, Putnam County, Ind.; James Luzar, landowner and retired Extension educator, Greencastle, Ind.; and Steve Myers, farm manager with Busey Ag Resources, LeRoy, Ill.
Erickson: Call me old-fashioned, but I still think an investment in field tile is an investment the landowner should bear. You could be creative in designing rental terms that provide help and/or incentive for improved yields from this investment, but ultimately, the landowner must see value. Talk to the landlord about the benefits of tiling so you can at least measure interest in this investment. Show the owner yield maps that visually highlight problem areas and potential costs to address areas with potential for greatest benefit.
Evans: Make sure that budgets for tiled versus continuing untiled are clearly illustrated, and provide conservative values that can be reasonably achieved. Since tile stays with the property, a logical scenario would be for the landlord to pay for tile and the tenant to pay or provide for installation, with a lease term that helps recoup installation costs. My belief is that if as tenant you aren’t pushy, you’re showing that you’re proactive and seeking the best for the landlord as well as yourself. If the landlord is reluctant, let it lie.
Playing devil’s advocate, if you don’t mention tiling when tiling is needed, another prospective tenant could make the case for tiling, and you could lose the 80 acres due to not being proactive.
Luzar: Have your ducks in a row by doing diligent research on potential costs and returns. You should be able to clearly communicate what the project will cost for materials and installation, as well as projected returns based on average crop prices. Make sure your talking points are not laden with agronomic jargon.
Who will pay for the investment? Positive landlord-tenant relationships could explore possible sharing of costs, especially if the tenant has a tiling machine. The typical arrangement is for tenant to install and landlord to pay for materials.
I would suggest making an agreement that prorates your cost over seven years, with landlord reimbursing tenant if tenant vacates due to landlord termination. If you’re asking the landlord to pay all costs, you must propose a sharing mechanism for recouping cost via higher cash rent.
You seem to lack confidence in this relationship. First, thank him for the opportunity to farm the property. Next, ask him what can be done to improve the relationship to make it even more sustainable. Then, bring forward your proposal about tiling.
Myers: To approach a landlord with suggestions on how to improve a farm should be enjoyable. If the owner doesn’t want to get on board, he or she can simply say “no thanks,” which is their prerogative. Present options for this work, and the tangible reasons in terms of returns or money, why they should consider any project. Listen and tweak as the discussion progresses, providing alternatives or different paths from Point A to Point B. A fair arrangement is one you can both amicably agree on.