A plan for adjusting cash rent to changes in the prices of farm products

Date
2017-08-16
Authors
Peck, Millard
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Altmetrics
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Extension and Experiment Station Publications
Abstract

On account of the downward plunge of the prices of farm products during the past two years and the uncertainty about the future, there is a demand that farm leases now used, providing for a fixed amount of cash rent, he changed to provide for a rental based upon the prices farmers receive for their products during the period of the lease. When a plan of this kind is followed, the amount of rent is determined at the end of the year on the basis of the prices received during the year.

Since a farm is usually rented during the summer or fall preceding the year the tenant moves on to it, a period of approximately a year and a half to a year and three-quarters has usually elapsed between the time the agreement is made and the time the lease expires. This intervening period is so long that the prices of farm products are likely to have fluctuated greatly in the meantime.

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