Farm Land Leasing, Zoning and Provincial Legistlation
FARM LAND LEASING
Three common land leasing arrangements apply to crop land.
· Crop share lease;
· Cash rent lease; and
· Flexible cash lease
In all three types, the landlord normally supplies the land and grain storage, and pays the property taxes. The tenant pays the operating expenses and supplies the labour and machinery to farm the land.
The division of income varies with the type of leasing arrangement. In the case of a crop share lease, the most common division is one-third share of all crop sales to the landlord and two-thirds share to the tenant. The income is often divided as the crop is sold. In the cash rent lease, the tenant receives the income from the crop sales, but pays the landlord a fixed amount each year as rent. Normally, the rent is paid in advance or by one-half payment in the spring before seeding and the balance in the fall after harvest of the crop.
With a flexible cash lease, the tenant receives all the income from crop sales, but the dollar amount paid to the landlord varies with either the price of grain, the yield of grain or both. This type of lease arrangement, which combines some of the features of the other two lease arrangements, provides some flexibility in rental rates and is important when sharp swings in grain prices occur within the marketplace.
In farm leases, many issues arise that are particular to farm situation and not incurred in any other commercial leases. The following issues are provided for illustration purposes only and are not exhaustive in nature.
· Possible restrictions on the crops to be grown.
· Possible restrictions on chemicals to be applied to the soil.
· How the land is to be left at the end of the lease e.g., fall tillage
· How the drainage ditches or natural water courses are to be maintained.
· What erosion control practices must be used.
· Use of any of the building on the land
· Adherence to weed control legislation provisions.
· Whether an incoming tenant can plow the land in the fall after the harvest.
· Whether the tenant can remove the crop of the land and the following spring after the termination of the lease.
In a crop share lease agreement, additional matters should be considered:
· Who will make the cropping decision.
· Who will determine the amount of crop inputs to apply and how these costs shall be shared
· The extent of crop insurance
· Who will receive any government payments of subsidies
· Who is responsible for the sale of the grain
The protection of land for agricultural purposes is fundamental to most zoning provisions in Southern Ontario. Such zoning generally seeks to protect agricultural regions within the province by preventing farmland from being converted to non-farm uses and preventing other intrusions by non-farm interests onto established rural, agricultural areas. In reality, this rural insistence on minimal intrusions is consistent with overall zoning principles in cities.
The definition of agricultural use and permitted uses under zoning provisions will vary by municipality, but generally refers to the use of land, with or without accessory buildings, involving the tillage of soil, growth and harvesting of vegetables, field crops, tender fruits and other cash crops, dairy operations and the breeding, grazing, boarding and training of all kinds of livestock. The definition also typically includes provision for buildings or structures involving manufacturing, processing and servicing establishments that support agricultural uses. These would normally involve farm machinery and equipment sales and repairs, seed, grain, feed and forage processing facilities, storage and transportation operations, and suppliers for seed, feed, fertilizer and chemical products.
Zoning requirements vary, as do building restrictions within specific zones. Registrants are cautioned that prospective buyers of agricultural land should have a clear understanding of the zoning, type of buildings permitted and any additional restrictions.
The accelerated migration of urban dwellers to rural parts of the province has, in some cases, created a conflict between those who farm for a living and those who use property for purely residential purposes. This has resulted in complaints surrounding noise, odour and dust arising from farm operations. The Farming and Food Production Protection Act (FFPPA) gives farmers protection from nuisance complaints and subsequent lawsuits or injunctions. The FFPPA also ensures that the farming and food production industry is protected from restrictive municipal by-laws that constrain normal farm practices.
Further, urban intrusion into agricultural areas has caused considerable concern among planners, particularly those involved with agricultural areas has caused considerable concern among planners, particularly those involved with agricultural land in or adjacent to the Great Toronto Area (GTA) and the Golden Horseshow. Many factors come into play including the reduction in total farm and arable land, high land prices due to urban speculation and dwindling agricultural services due to loss of agricultural support services. The Greenbelt Act, 2005 provided for the creation of a greenbelt plan to protect about 1.8 million acres of environmentally sensitive and agricultural land in the Golden Horseshoe.