Rental Premiums For Share Versus Cash Leases
Non-risk factors primarily determine the probability of paying positive premiums to landowners for bearing greater risk under crop share versus cash leasing arrangements. The trends toward higher cash rent levels on larger farms may indicate that higher cash rent is a bidding strategy to control additional leased acreage and perhaps to avoid management sharing with multiple landlords. Expansion of farm size may be more important than soil productivity in negotiating higher cash rents, due to potential size economies and under utilized machinery investments.
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