Renting Your Land Sustainably
Table of Contents
Farmland rental is widespread and growing. Approximately 60% of Ontario's farmland is owned by people who work on the farm (McDonald, 2013) and 40% is owned by non-users. Non-farming landowners can benefit from the opportunity to influence the land management practices of their tenants by encouraging the sustainable management of their land.
Forages (e.g., hay, pasture, alfalfa, clover, grasses) and grazed livestock (particularly cattle and sheep) produce agricultural and environmental benefits valuable to landowners, such as improved soil health. However, these benefits require longer timelines (rotations) than year-to-year decision making allows and as a result are more difficult to implement on rented lands.
Part One of this factsheet outlines advantages to landowners of encouraging the production of forages and grazing livestock on their land.
Part Two of this factsheet outlines the advantages to landowners of signing long-term (10 years or longer) written leases that include specific land-management clauses, with farmers committed to producing forages and grazing livestock on rented land.
Declining Forage Production
Ontario has experienced widespread conversion of forages to grain and oilseed production. The total area of Canadian crop and pasture land used for the production of soybeans, wheat and corn increased from 28% in 1976 to 57% in 2011. This resulted in a rapidly shrinking area of land for forage production, as shown in Figure 1 (McDonald, 2013; Statistics Canada, Census of Agriculture, 1976-2011; Weersink and Deaton, 2013). Between 2006 and 2011, Ontario lost 288,946 hectares (714,000 acres) of forage crops associated with livestock (McDonald, 2013).
Figure 1. Changing Canadian agricultural land use: demonstrating a long-term increase in land area for grain and oilseed production and decreasing area for pasture, hay and other forages.
Source: Statistics Canada, Census of Agriculture, 1976-2011.
Agro-Ecological Impacts of Continuous Row Crop Production
Figure 2. Depicting nutrient flows in integrated forage and livestock production, contrasted with nutrient flows in separated feed and livestock production.
The growing of fewer forage crops in favour of continuous grain and oilseed production (three or fewer crops in rotation) exposes farmland to degradation such as soil erosion and nutrient runoff. This can make farmland less valuable for agricultural production and future rental (Jamieson et al., 2012; Wu, 2008).
A large proportion of Ontario's grains and oilseed harvest is used for livestock feed. Having livestock and crop production occur at different locations can result in nutrient depletion of soil in croplands and a concentration of nutrients at locations of livestock production (Clark, 2004). The contrast in nutrient flows between integrated and separated livestock, feed and forage production systems is shown in Figure 2.
Benefits of Producing Forages and Grazed Livestock
Soil Nutrient Improvements
Landowners that allow livestock grazing on their rented land can benefit in a number of ways. Forage-based livestock production improves soil quality by creating cyclical nutrient flows as shown in Figure 2. Additional improvements to soil quality include nitrogen fixation by legume forages, year-long soil cover that reduces nutrient leaching and accommodates mineralization and enhanced microbial diversity from livestock manure (Bayer and Waters-Bayer, 1989; Brown, 2005; Clark, 2004; Odriozola et al., 2014; Yungblut, 2012). These improvements can reduce dependence on fertilizers and herbicides.
Figure 3. This rainfall simulator shows how soil management decisions affect water infiltration (vials in the background), overland runoff (vials in the foreground) and resulting soil erosion.
Another advantage is that forage residues typically increase soil organic matter (SOM) and available nitrogen (Yungblut, 2012). Similarly, the manure deposited by grazing livestock can also improve SOM levels. A study by (Rotz, 2016) found that SOM levels increased to 4.4% when livestock were present compared to 3.3% when livestock were absent. SOM improves the resilience of soil during drought, as well as increasing the availability of nutrients, and improving general plant health and performance. Encouraging land management practices that increase levels of SOM will benefit landowners by improved soil quality.
Reduced Erosion and Improved Drainage
As shown in Figure 3, forages provide year-round soil cover which enhances water infiltration while reducing erosion and nutrient leaching. Yungblut (2012) reported that including 2 years of hay in a 4 year crop rotation decreased erosion rates by 60%-70%. Similar conclusions have been drawn by Fraser (2004) and Clark (2004). Another benefit is that forage roots improve the porosity of soils, which increases infiltration, drainage and resilience of soils during droughts, while also reducing soil compaction (Fraser, 2004; Yungblut, 2012).
The Value of Farmland for Cultural Heritage and Biodiversity
Integrated forage and livestock production can help maintain characteristics of the rural landscape and a region's cultural heritage. This supports farmland's value for recreational and tourism purposes (Canella and Waterman, 2014). Forage-based livestock is an attractive and culturally significant feature in Ontario's countryside and can provide additional on-farm revenue through agri-tourism.
Producing forages and grazed livestock increases local biodiversity by providing habitat for small mammals, grassland birds and pollinators, including some species-at-risk (Solymár, 2005; Yungblut, 2012). Pastures are important nectar sources for pollinators; a study in Saskatchewan found that pollinators supported by forages are worth up to $23/hectare (Solymár, 2005; Yungblut, 2012). Well-maintained pastures can provide wildlife with areas for nests, shelter and migration stops (Solymár, 2005).
Livestock grazing on forages can effectively control weeds by removing undesirable species and reducing weed seeds (Clark, 2004; Yungblut, 2012). Forages require very little herbicide application, which can reduce local prevalence of herbicide resistance.
Part Two: Creating a Lease Agreement to Encourage the Production of Forages and Grazing of Livestock on Your Land
Signing long-term leases with producers of forages and grazed livestock will support the sustainable management of your farmland. The benefits may justify reduced rental rates or long-term contracts with producers implementing complex crop rotations and grazing livestock. Carefully structured leases can ensure that rented farmland is well-managed, retains its environmental integrity and returns to landowners with added value.
Typical Impacts of Farmland Rental
As there are few incentives for farmers to invest in the long-term health of rented land, it tends to undergo fewer practices to increase soil health, which can reduce soil fertility and increase soil erosion (McDonald, 2013; Rotz, 2016; Sklenicka et al. 2015; Wu, 2008). The possible causes of this trend may include the use of short-term rental agreements, absence of written leases, rising rental rates and competition in the rental market (Rotz, 2016).
Short-term agreements and high rental rates increase pressure to maximize revenue by continuously producing corn, soybeans and wheat (without rotations of hay), and to produce on unsuitable land (e.g., sloping or eroded land). Cyclically high prices for grains and oilseeds, and rising rates for rented farmland can make it difficult for farmers to economically justify producing forages on rented land (Yungblut, 2012) at several points in the commodity price cycle. These practices can lead to a decline in soil health (Fraser, 2004; Rotz, 2016; Sklenicka et al. 2015).
Landowners can benefit from specific, written leases that ensure livestock graze on forages on rented farmland (Bowman et al., 2008; Canella and Waterman, 2014). Landowners can make a long-term investment in their land by renting to farmers who will produce forages and graze livestock.
To ensure good management, leases should:
Land and soil stewardship are long-term investments and long-term leases create incentives for renting farmers to invest in the agro-ecological health of farmland (Rotz, 2016). Few renting farmers - particularly those with verbal and short-term rental agreements - can be confident that they will enjoy long-term benefits if they invest in soil health (Rotz, 2016). Similarly, grazing livestock comes with substantial up-front investments (e.g., installing fencing, housing, water pumps, etc.) that can take up to a decade to depreciate. Therefore, renting farmers need to be supported through long-term leases and potentially lower rental rates that reflect their investments in land quality improvement, and allow them to produce forages and graze livestock. More information on writing lease agreements can be found on the OMAFRA website at ontario.ca/livestock.
More Thorough Leases
Although it is common practice to rent farmland through handshakes and verbal agreements, formally-written leases are not a sign of distrust, but rather demonstrate accountability and responsible management.
In addition to being long-term, lease agreements could stipulate that renters produce forages, use complex rotations and graze livestock. Additionally, leases can include the following components to encourage good management:
Structured, long-term farmland leases that encourage the production of forages and grazed livestock can benefit landowners by improving the long-term ecological health and value of farmland. While many of the benefits of forages and grazed livestock are difficult to quantify, innovative long-term leases can set rental rates that consider improvements to the long-term ecological health, productivity, beauty and capital value of rented farmland.
This factsheet was written by Marion Davies, Livestock Sustainability Assistant, OMAFRA, Guelph and Christoph Wand, Livestock Sustainability Specialist, OMAFRA, Elora.
For further reading on structuring effective leases and determining fair prices for your rental land, OMAFRA has several relevant factsheets and publications available on our website, including:
For more information:
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