The primary disadvantage for the custom operator is that in a good year, the custom operator would earn less than if he was in a conventional lease, but that is the normal trade-off for reducing risk. Several factors need to be considered in setting up the custom farming arrangement that can significantly reduce the potential for conflict between the landowner and custom operator. There should be a written contract between the parties that outlines the responsibilities of each party. And, negotiate the payment rate using sound economics. This should be spelled out clearly in the custom farming contract.
Many people refer to custom rate guides if available.
Custom farming is a relatively new type of farming arrangement in Texas. As more producers become aware of this type of arrangement it is likely to become much more prominent in the future.