By: Kari Burnett, PAg, Regional Farm Business Management Specialist
Leasing private pasture land is a common arrangement in Saskatchewan. A detailed written lease agreement provides a legal document that sets out the terms of contract between the landlord and the tenant. Both parties should carefully examine the agreement and get legal advice to ensure the terms and conditions are acceptable and address all their concerns.
A cash rental is the most common agreement. The landlord is paid a fixed sum each year and the tenant in return receives full use of the land for the indicated purposes and all income produced from the pasture. The key inputs in the pasture rental agreement are the land and cattle, but there are normally other costs to consider such as fencing, taxes, and pasture rejuvenation. There may also be other revenues such as government payments. An effective lease agreement will determine in advance how all costs and income are to be treated.
The carrying capacity and stocking rates will impact the lease rate. Carrying capacity is the average number of grazing animals that can graze the forage year-after-year without damaging the vegetation or soil. Stocking rate is the actual number of animals or animal units on the pasture for a specified period of time. Carrying capacity does not fluctuate yearly, while stocking rate does fluctuate due to the impact of weather on the amount of forage production. The number of grazing days should be stipulated in the lease agreement to prevent over-grazing and to ensure proper pasture rejuvenation. Regional Forage Specialists with the Ministry of Agriculture can provide more in-depth information on stocking rates, carrying capacity and pasture productivity.
In addition to negotiating the lease rate, the landlord and tenant must also agree on who is responsible for fencing repairs and for surveillance of livestock, water supply and pasture condition. The landlord may want to establish restrictions on the use of pesticides where use of the land for activities other than grazing livestock.
A leasing agreement should also address liability issues for both parties and provide flexibility of lease terms in the event of drought or adverse weather conditions. The parties involved may have differing assumptions on their roles and responsibilities if they are not clearly stated in the agreement.
Lease rates can be negotiated based on a variety of methods. An example from lease rate calculations and sample pasture lease agreements is included in the publication Pasture Lease Agreement available by contacting your local regional services office.
Both parties and their estates are protected by a well-written agreement, which includes these considerations, as well as specifying the duration of the rental period and the termination conditions.
For more information stop by or contact your local Regional Office or contact the Agriculture Knowledge Centre at 1-866-457-2377.