Some cash rent landlords see these payments as a windfall to their tenants who receive the total payment because they get the total crop. Since payments do compensate the producers for risk, there is some justification for considering this in the cash rent agreement. However, with the freedom to plant provisions, these payments may not relate to the actual acres planted or all of the risks. Negotiations on this point should consider all of the factors involved as well as the government program intentions and requirements. Cash rents should not be based on short term prices or the farm's best yields.
Yields vary too.
Recognize that yields have trended upward, but leases should be based on realistic yield expectations. If landlords want to participate in higher prices or above average yields, variable cash rent arrangements can be developed. Remember this increases the landlord risk because a fair variable rent arrangement also means the landlord will participate in low prices and poor yields. Other lease forms are being explored in an attempt to solve some of the problems. Privilege rent or up-front payments to rent farm land is one example sometimes being used to cope with the new government program payments.