FORSYTH, Mo. – Despite the benefits of conservation practices on farmland, differing goals and expectations can create tension between landowners and tenants when talking about incorporating them into a land lease.

According University of Missouri Extension agribusiness specialist Jacob Hefley, thoughtful conversations and clearly outlined provisions between the two parties can ease this tension.

“Often, both the landowner and the tenant want what is best for the leased ground and its productivity,” Hefley said. “However, landowners are often more focused on long-term productivity, while tenants are more concerned about short-term productivity. When considering incorporating a conservation practice into a farmland lease, the landowner and the tenant need to come to the table with an open mind about how the practice can be beneficial to all involved.”

Hefley noted that there are three major topics to discuss before incorporating conservation practices into a farmland lease:

1. Outside contracts with government agencies or ecosystem markets. There are several agencies at the local, state and federal levels, as well as ecosystem markets and nongovernmental organizations, with programs that may incentivize farmers for incorporating conservation practices. These programs often require contracts that specify what conservation practices are allowable as well as payment provisions and timelines for activities. Landowners and tenants should discuss potential or existing outside contracts, including their terms and obligations, to avoid financial penalties or compliance violations.

2. The responsibilities of each party to incorporate a successful plan. Conservation practices often involve an initial investment and subsequent maintenance activities, both of which can vary in required labor and cost. Landowners and tenants should discuss who is responsible for the costs associated with these activities, what is permissible in the lease agreement and potential liability held by each party. These details should be agreed upon and documented in the lease agreement.

3. The life of the conservation practice relative to the duration of the lease. Depending on the type of conservation practice and structural changes required, activities and responsibilities might require a multiyear commitment. This commitment can evoke hesitation from both parties as they weigh the impacts on production and return on investment. A written lease is critical to avoid misunderstandings and clarify how a conservation practice will affect production each year as well as during extenuating circumstances such as death or land sales.

“By discussing contractual obligations, each party’s responsibilities and the timeline of implementing conservation practices relative to lease duration, landowners and tenants can walk away feeling informed and more prepared to develop a lease agreement desirable to both parties,” Hefley said.

MU Extension has a new guide to help landowners and tenants navigate these conversations along with legal considerations. “Incorporating Conservation Provisions in Leases” is available for free download at https://extension.missouri.edu/publications/g433.

For more information and tools to facilitate leasing conversations, join MU Extension for a November webinar series on current trends in farm leases. Dates and topics can be found at http://muext.us/currenttrendsleases.