What are the main types of agricultural leases?
The main types of agricultural leases are cash rent leases and crop-share leases. In a cash rent lease, the tenant pays a certain price to the landowner for the parcel of land that they are farming, sometimes calculated by acre. In a crop-share lease, the tenant gives the landowner a certain percentage of the crops that they produce. Crop-share leases offer higher rewards and higher risks, since the value of the crop may be uncertain. Some recent leases combine elements of cash rent and crop-share leases.
How does a farmer benefit from a production contract?
A farmer benefits from a production contract by setting a fixed price for their commodity on which they can rely, rather than being subject to market fluctuations. They may receive technology, resources, and other support from the contractor that help them produce the commodity. A farmer also may find it easier to finance their operations if they have set up a contract. A contractor might supply them with funding directly, or a lender might be more willing to issue a loan if they know that the farmer will receive steady income under the contract.
Can a farmer get a loan from the government?
Yes, a farmer who cannot get a loan from a bank or insurer at a reasonable rate can get a loan from the federal Farm Service Agency, which is part of the US Department of Agriculture. The Farm Service Agency directly provides farm ownership loans, operating loans, and emergency loans. It also operates a guaranteed loan program for farm ownership and operating loans offered by commercial lenders. Meanwhile, the Farm Credit System is a government-sponsored enterprise consisting of federally chartered banks and associations that issue loans to agricultural producers and cooperatives.
Does a farmer need to move if a residential community forms around them?
Not necessarily. If the farmer already operated agricultural activities on their property for a certain period of time before the land use changed, they likely will not be required to move or pay damages. In other words, they will have a defense against nuisance claims brought by homeowners. To use this defense, the activity must not have been a nuisance before the land use change, and the farmer must comply with regulatory requirements.
What is the purpose of farmer cooperatives?
Cooperatives help farmers mitigate external risks, such as market fluctuations or natural disasters, and improve their access to markets. Marketing cooperatives may buy commodities produced by their members at the prevailing market price, which provides them with a guaranteed return. Meanwhile, supply cooperatives may sell inputs for agricultural production to their members at reduced prices after buying them in bulk for a discount. Cooperatives also may offer loans to members and handle marketing and bargaining tasks on their behalf.
How do farmers form or join a cooperative?
Farmers must meet formal state requirements to form a cooperative. These may be standard requirements for forming a corporation, or they may be specific to the cooperative form. The founders of the cooperative must file articles of incorporation or other founding documents, adopt bylaws, and elect a board of directors. The board will choose the cooperative manager or CEO. Joining a cooperative usually requires a farmer to make an initial investment, and some cooperatives require recurring investments.
What is the difference between land retirement programs and working lands programs?
Land retirement programs and working lands programs are both types of agricultural conservation programs. Land retirement programs move agricultural property from a production use to a conservation use. Working lands programs establish conservation practices on agricultural property, but they allow the property to continue a production use to some extent. These programs have become more common in recent years after land retirement programs initially dominated.
Do minimum wage and overtime rules apply to agricultural workers?
Federal minimum wage and overtime rules under the Fair Labor Standards Act apply only to some agricultural employers. These are employers that used more than 500 man-days of agricultural labor during any calendar quarter of the preceding calendar year. (A man-day is a day in which an employee works for at least one hour in agricultural labor.) However, state and local laws may provide stronger protections for agricultural workers.
How does a food company get approval for an additive?
Generally, an additive must be reviewed by the federal Food and Drug Administration before it is released for consumption. The FDA will consider whether the additive is safe under the specific circumstances after reviewing safety data provided by the food company. However, a substance generally recognized as safe (GRAS) is not subject to the requirements for additives. This means that qualified experts have determined that the substance is safe under the circumstances surrounding its intended use.
How do states allocate rights to surface water?
Eastern states usually allocate rights to surface water under the riparian doctrine, while western states often use the prior appropriation doctrine. The riparian doctrine provides that only property owners that own land adjacent to a watercourse can use the water. They must take the water for a reasonable use and refrain from interfering with the water rights of downstream property owners. The prior appropriation doctrine allows the first person to divert a certain amount of water from a natural course for a beneficial use to take priority over other users of that water source. They can continue to take that quantity of water for that use, regardless of how much water other users need.