Rental arrangements often appear unresponsive to changes in production practices and generally slow to change over time. Producers generally work with multiple landowners and may be reluctant to change rental arrangements with any one landowner unless changes can be made with all landowners. Rental arrangements may be slow to change because land is often rented from the same landowner for an extended period of time and the parties involved may feel that the costs of renegotiating the rental arrangements on a regular basis outweigh the benefits. Determining crop shares. Establishing terms for crop share rental arrangements is often a struggle.
Economic theory says that equilibrium rates occur where supply of land equates with demand for land.
The concept of an equitable crop share arrangement is to identify all contributions made separately by a landowner and a tenant and then share any income in the same proportion. The underlying assumption of an equitable lease is that returns to land are similar to the returns to non-land inputs. Principles of Crop Share Leases. Principle 1 refers to inputs where yield is a continuous function of the use of the input. Examples of yield increasing inputs are fertilizer, irrigation water, possibly herbicides in semi-arid regions, and possibly hybrid seed.