Agriculture

Iowa's high rate of rental farms discourages conservation

'Hard to convince landlords to adopt conservation practices that will cost them money'

Steve Berger stands in a hole he dug to demonstrate the depth of the roots of rye he planted as a cover crop before he plants corn later in the season. Berger has been a practitioner of no-till farming for 40 years on his on his farm near Wellman on Thursday, March 19, 2015. (Cliff Jette/Gazette File Photo)
Steve Berger stands in a hole he dug to demonstrate the depth of the roots of rye he planted as a cover crop before he plants corn later in the season. Berger has been a practitioner of no-till farming for 40 years on his on his farm near Wellman on Thursday, March 19, 2015. (Cliff Jette/Gazette File Photo)

The high percentage of leased farmland in Iowa — more than half the total — impedes implementation of conservation practices needed to curb water pollution, knowledgeable observers say.

“That is definitely the perception, and there is some truth to the perception,” said Mark Licht, who recently helped Iowa Learning Farms develop publications intended to stimulate farmer-landlord discussions of conservation.

The dual lines of decision making and responsibility inherent in the landlord-tenant relationship make it easier for conservation decisions to be postponed or ignored, said Licht, an assistant professor of agronomy at Iowa State University.

“If each thinks the other is going to take care of it, it’s probably not going to happen,” he said.

Wendong Zhang, an economist who heads ISU’s annual land values survey, said much of a tenant’s reluctance to engage in conservation practices stems from what he calls “land tenure insecurity.”

The most common farmland lease in Iowa is for a single year, he said.

“You don’t know how long you will have the land,” which makes it hard to engage in long-term, expensive conservation practices, Zhang said.

That leads to a problem with conservation efforts, Zhang said, although he said he believes the extent of it has been exaggerated.

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Low commodity prices, slim profit margins and falling land rental rates — all prevalent in recent years — tend to lower conservation priorities for both landlords and tenants, said Sara Berges, a water quality coordinator for the Allamakee County Soil and Water Conservation District, which four years ago started a program to encourage landowners and tenants to develop conservation plans and incorporate them into lease agreements.

In 2014, Iowa’s 105,194 landlords rented out 16.33 million acres — 53.4 percent of the state’s farmland, said Zhang, citing a 2014 U.S. Department of Agriculture study, the latest information available.

About 21 percent of leased Iowa farmland is owned by nonresidents, and more than 43 percent is owned by trusts (23.9 percent), partnerships (14.4 percent) and corporations (5.3 percent), according to information provided by Zhang.

“It’s a huge problem,” said recently retired Linn County farmer Curt Zingula, who has approached conservation decisions both as a tenant and a landlord.

“It’s hard to convince landlords to adopt conservation practices that will cost them money,” he said.

Zingula recounted one success story in which he persuaded a landlord to establish a substantial riparian buffer complex consisting of grass and trees on land that he had been farming at a loss.

The landlord, who had once removed trees from the area to farm it, was understandably reluctant to reestablish them, especially since the government payment for doing so would be less than the cash rent, Zingula said.

Eventually the government payments increased enough to exceed cash rent, and the landlord was pleased with the decision, he said.

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Poweshiek County farmer Craig Lang, a former president of the Iowa Farm Bureau Federation, said he worries especially about absentee landlords — “outside investors” for whom farmland is part of a portfolio.

“They are less concerned about the long-term future of the land and more concerned with the net return on their investment,” he said.

To prevent what he calls “mining of fertility,” Lang said he’d like to see lease agreements that protect the sustained value of farmland.

Mark Gannon, who operates a Des Moines-based farm real estate and consulting firm, said he encourages landowners and tenants to include conservation addenda in their lease agreements.

Those agreements, he said, spell out conservation goals and help both parties meet their responsibilities to ensure the soil’s health and productivity.

Because of the long-term paybacks for many conservation practices, Gannon said he also encourages owners and tenants to sign longer-term leases.

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