What Is a Fair Rental Rate for Farmland?
One of the most common questions we get at NC FarmLink is “What is a fair rental rate for this farmland?” According to the 2017 USDA Ag Census, NC farmers leased 3,533,542 acres from other landowners. Written leases are strongly recommended because they provide security to both the landowner and the farmer. A written lease makes the terms of the lease clear and defensible in the event of a land transfer or farm sale.
NC farmland rental rates can vary widely from $35 to $240 per acre for cropland, with most pastureland rent from $15 to $45 per acre. In some situations, landowners may offer a no-cost lease to farmers who agree to keep the land in production. Landowners who rent their land to farms may be able to maintain Present Use Value reduced tax rate with documentation that the land produces $3,000 over a three year period.
NC FarmLink is pleased to share this new web resource on “Leases & Renting.” It has some useful guidance and data that may be helpful to develop your own lease and rental parameters.