Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: West

Increase Profits With Flexible Cash Leases

Flexible cash rents can be good for both tenants and landowners, says Burton Pflueger, SDSU Extension farm management specialist.

A flexible-cash lease is a rental arrangement in which the landowner receives a predetermined cash fee from the tenant adjusted for changes in prices or yields. The tenant produces crops on the land and makes general management decisions as if the land were owned by the tenant. The landowner retains the right to share in the additional income resulting from unexpected increases in crop prices and above-normal yields. The operator has less risk than with a fixed-cash lease. Rent expense is lower if prices or yields are below normal.

In addition, under some types of flexible rent arrangements, the higher the yield, the more the tenant will pay to the landlord. This may reduce the incentive to manage for higher yield.

Flexible leases are more complicated than fixed leases, says Pflueger, who has written two publications that outline different types of flexible leases.

See them at  

Source: SDSU AgBio Communications

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.