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How to account for disasters in ag land leases

Editor’s note: You can listen to my conversation with Jim Jansen by clicking on the Soundcloud link embedded in this blog.

Each year, as part of its Farm Real Estate Market Survey, the University of Nebraska-Lincoln’s Department of Agricultural Economics surveys a panel of ag land industry professionals for a special feature section.

This year, the special feature covered historic flooding and excessive moisture over the previous decade in Nebraska, and implications and rental rate adjustments for land at risk of flooding.

Jim Jansen, Nebraska Extension agricultural economist and one of the authors of the survey, notes that out of Nebraska’s roughly 22 million acres of cropland, there were about 421,000 acres of prevented plant in 2019.

The survey posed the question: Do ag land leases include provisions that account for excessive moisture?

“What we found based on our survey panels responses, over three-fourths of responses did not have any lease provisions to account for flooding damages,” Jansen says. “When we take a look back at annualized data of prevented plant cropland, typically over the last decade from 2010 to 2019, we only had on average — this is a fairly sizable number, but I say only because it’s relative to 22 million acres — we typically only have about 81,000 acres of prevented plant. If you would throw out 2019 as well as 2015 [2015 we had about 190,000 acres of prevented plant], if you throw those two years out, on average we only have about 25,000 acres of prevent plant.”

In the latest episode of Down In The Weeds, Nebraska Farmer talks with Jansen about the survey results and provisions that could be included in ag land leases to address excessive moisture, as well as provisions for ag land affected by other natural disasters or extreme weather events.

“We can have flooding in Nebraska, and when we do have flooding, it can be a major concern that we need to address,” Jansen says.

 

— to www.farmprogress.com

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