By Alicia Sopatyk, PAg, Livestock and Feed Extension Specialist, Tisdale
This cold weather may make it feel like the grazing season is far away, but according to the calendar, there’s only a few months between now and green grass. Now is as good a time as any to talk about renewing or developing your pasture lease agreements for the upcoming season.
Private pasture lease agreements are legal documents that set out terms of an agreement between the landlord and tenant. They take the details and specifics of a situation into account to stipulate the terms of the agreement. It can be beneficial to learn what others are including or charging for their pasture lease but it is up to the individual landlord and tenant to decide on the terms of their agreement. For example, the landlord may be supplying the physical land, but the tenant is responsible for checking the fence, water sources and animals, and as such, may be awarded a lower rental rate.
A thorough lease agreement determines in advance how all costs and income are to be treated. Costs can include fencing, labour, fuel to pump water, water testing, forage enhancements, insurance and land taxes. Income, typically in the form of pounds gained, should also be discussed, keeping pasture health in mind but also a payment schedule that works for both sides. It’s about having a contingency plan that’s still equitable to both parties if the season doesn’t cooperate. And while these agreements are often between neighbours or families, they should detail the liabilities or “what if” scenarios. For example, what if the livestock escape the fence and cause an accident on a nearby road, who is liable? A written agreement provides a reference greater than the mind; especially helpful when a dispute arises.
Rates are the most talked-about factor of any pasture agreement; talking to your neighbours or searching buy and sell sites can provide a market value, but it’s the landlord and tenant who need to agree on the price. Rates can be determined in a number of ways, for example, per acre of pasture, per head of livestock, per Animal Unit Month (AUM), income-sharing based on predetermined shares or the market approach. From a landlord perspective, think about what you need to get out of this rental agreement. Are the tenants doing you a favor by doing brush control or are you seeking a profit? If seeking a profit, what is reasonable? From a tenant perspective, think about what you need to get out of this rental agreement. Is there a specific average daily gain you’re aiming for? When determining the rental rate consider stocking rates, carry over and pasture health.
There are lots of factors to consider when developing a pasture lease agreement. As with any legal document, it is recommended to work with a lawyer and to have the agreement written out for reference. It’s never too early to start discussing the terms of your agreement.
For more information, check out the Pasture Lease Agreement document or contact your nearest Livestock and Feed Extension Specialist.