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Buying farmland

neoplasticity Hatfield


Joined: May 03, 2010
Posts: 31
Here is the dilemma.  Let's say for example, I have a large sum of money in cash just sitting around.  I don't want to invest in equities or gold or anything because if the great depression happens again, I can't eat gold or stocks or cash. 

I could use this money to buy some good land perhaps.  But I need to stay at my job and I'm just a newbie at farming or permaculture.  Do you think anyone would be interested in "developing" my land into a sustainable permaculture type farm?  In exchange, they could live on the land for free and they could sell whatever they produce for profit.  If the sh!t ever hit the fan, I would move myself and my family into the land and they would be more than welcome to stay on the land with us.  then they could teach me how to farm and we could farm it together.  If economic collapse doesn't happen after about 5 years, I would ask for some rent on the land which would be predetermined.

Does this sound like a reasonable idea or is it just stupid?


http://iehomestead.blogspot.com
Walter Jeffries


Joined: Nov 21, 2010
Posts: 893
    
  17
Sounds like a great idea. Everything should be well discussed and clearly spelled out in writing. I would suggest allotting in the agreement that in time they will earn a small acreage which you retain right of first refusal on should they wish to sell. That way when they get to retirement they can have a place that is paid off. That spot might be the homestead they're working.
John Polk
steward

Joined: Feb 20, 2011
Posts: 5861
Location: Moving to: NE Washington USDA zone 5 Western steppes to the Rockies
    
  88
Too many "ifs" involved.  "If" inflation hits 100%, interest will be 110% or higher.  A loaf of bread might be $300 in deflated dollars.  Rather than putting a dollar value on it, you would need to put "fair value" on it.  And, "fair value" is not the same in everybody's eyes.

If these people had spent the time and energy developing your land, they would need to be compensated at current values, not today's values.

You might be better off paying them a fixed fee NOW, but with an understanding that they will not be thrown out on their ears when TSHTF.  If they built it for you, they deserve royal treatment if/when TSHTF

neoplasticity Hatfield


Joined: May 03, 2010
Posts: 31
Does anyone know how tenant farmer agreements go?

http://en.wikipedia.org/wiki/Tenant_farmer#United_States


Basically, I was hoping that this would be a good business venture for both me and my partner in this endeavor regardless of what the economic situation was.  If the economy is stable, I think food prices will increase and that farming will be a good business, especially boutique organic farming if you find the right market.    I'm not looking to make much money on this venture.  I think it would be really cool to own a farm and if it does really well, the lion's share of the profits would go to my partner who is obviously doing the work.

if the economy collapses, at least we can feed our families.  and if TSHTF, i'm a surgeon and that might be a useful skillset around a farm... i could be a decent vet and if people got injured or sick, i'd be better than nothing.

I would bring capital to the equation and my partner would bring labor and expertise to the table.

I'm hoping there is someone who is excited about starting a permaculture type farm but doesn't have the capital to buy enough good land.  Should he or she be successful, they could buy their own land down the line or buy a portion or our land.

seemed like a good idea.... pubwvj thinks it is, but Mr. Polk has doubts.

also, does anyone know where the easiest geographic area to do this would be?  I'm guessing someplace with ample water and a long enough growing season...  would Wyoming/Idaho/Montana be good or someplace more like Arkansas?    or maybe Pennsylvannia or maybe the pacific northwest?  Central california is farming mecca but that is industrial farming using water pumped up from aquifers...



neoplasticity Hatfield


Joined: May 03, 2010
Posts: 31
hmm, i found an informative document

http://aces.nmsu.edu/pubs/_circulars/CR-598.pdf

Gord Welch


Joined: Sep 25, 2010
Posts: 64
Location: Oregon
I would be someone who might be interested in such a proposition. I've been looking around for just such an opportunity and have been in conversation with several landowners about doing precisely what you've described. There are very few land owners who know/care about permaculture. Renting land from "conventional" folks is very difficult because it's lucky if they even know/care about small farmers at all. Everything (including almost all agricultural laws) has been designed for the cash crop or year to year lease.

As for the agreement, forget looking to any other source for an example or help of any kind as this is a unique situation. In my opinion, it would be best to negotiate and come to an agreement. It should not be an adhesion contract, but a real contract that is a meeting of the two parties. If you want to have a relationship with whomever works on your land, having a mutually acceptable contract is best. It doesn't have to be lengthy, just include what's important and necessary - and you don't need a lawyer. Decide what the terms are and write them down. Not so difficult for two people who speak the same language.

That said, any location is good - it's permaculture!!! The only caveat being that there must be enough land, and it must be near enough to the intended market. Some of the best land available is nowhere near where people live.

It sounds like a great business venture. Capital meets skills; each side has something the other wants. In this type of farming(?), a long term commitment is the very best - no farmer wants to invest their heart and soul in a piece of land which they are only going to be on for a short time. The farmer who has land for a long time will use that land very differently from one who does not. For example, the quality of fencing and construction projects would be much better; a wider variety of species would be planted; and perhaps certain project will get done which might have never been considered for a short term commitment. Bees really come to mind for me: if I had land a short time, I'd not plant many flowers or fruit trees - I'd plant crops I could sell for money; however, if I had land for a long time, I'd plant lots of fruit trees and many varieties of flowers... just for the bees. Which actually benefits my veggies in the long term.

Your bit about asking for rent after five years is interesting.... what changes? Why rent? Perhaps I could suggest a more creative way to work through it... like say, providing your family with unlimited food? Keep in mind that land needs a caretaker to protect it from vandals and most things (buildings, fences, roads, etc) need continual upkeep - could these things actually be more valuable to you than money?

Another thought about your interesting in Tenant Farmers....why not continue the relationship after you move onto your farm? You can have your own projects and keep busy with the household business while the farming continues as always. Grow old with your tenant farmer always a tenant. Just a thought.

You have an excellent idea. Work with it, refine your goals and find the right person for you and your land - and it will work. Good luck.
Leila Rich
steward

Joined: May 24, 2010
Posts: 3473
Location: Wellington, New Zealand. Temperate, coastal, sandy, windy,
    
  63
I have no practical experience, but a  big question for me in a SHTF scenario, is what would happen to the people who'd helped create your farm? Out to face the...whatever?
Something along the lines of what gordwelch suggests, where you have a permanent-ish 'tenant farmer' type agreement sounds interesting, if complicated.
I think people who know the land,  have the skills, and 'have your back' would be invaluable in an unstable world.
neoplasticity Hatfield


Joined: May 03, 2010
Posts: 31
Yes, I realize that this agreement would not be like the regular tenant farmer agreement as those are geared toward annual crops that have a quick turnaround.  Permaculture would involve planting trees and shrubs and setting up systems that are often self perpetuating but would take alot of effort and planning initially to setup.  Also harvest and yields would be delayed by several years.  So this would obviously have to be a long term commitment on both ends.  If I was the farmer, I wouldn't want to spend a couple of years planting trees and shrubs just to be told by the landowner "sorry this isn't working out" and be booted off the land just as the things are starting to produce.  That is obviously wrong at many levels.

On the other hand, if I was the landowner, I'd hate to offer my land for basically free to someone only to have them rape and pillage the land by planting annuals only that deplete the soil and profiting early and leaving no lasting value on the land and then when the land is depletely moving on and saying "sorry this isn't working out"

The reason I said rent after 5 years is because I think that would be a reasonable length of time for a permaculture type farm to become productive.  I would be more than happy to accept food in lieu of rent however, this land is most likely going to be very far away from where I live.  Land prices in southern california where I live is very expensive and I would probably be buying land in a pretty remote rural setting because of the land cost.  I was thinking that rent would be pretty minimal. 

As long as the person was good, I would be happy for them to stay there until they are too old to take care of themselves.
Ryan H


Joined: Dec 03, 2010
Posts: 58
This kind of dialogue makes me so happy.  Thank you sir for wanting to spend your money on permaculture futures!

Think about where you would like to live first and the rest will follow.

Best of luck!
Pat Black


Joined: Dec 20, 2009
Posts: 123
Location: Northern New Mexico, USA
My farm was not at all profitable in 5 years, so I suggest you extend that time frame to somewhere between 8 and 15 years.

Do you intend to provide capital for all the investments needed to make the land produce? If not, I seriously doubt your model. Farming margins are so slim that no one is going to invest in another person's property. A bare piece of land with water rights still needs immense development to create a profitable farming system.

I've been offered land to farm and turned it down because the land was controlled by people who didn't know a darn thing about farming. It just seemed like a few years would elapse and they would have some crazy idea about land use that was incompatible with what a real farmer would do. I preferred to stay on my own property and answer to no one. Of course not everyone is in that situation. I don't want to build soil and farming systems on land I don't own.

So here's what a deal might look like that would work for an experienced farmer. Buy a decent size parcel that already has fencing, barns, outbuildings, and a small farm house. This parcel should be within 2 hours drive of a major market for produce. Immediately subdivide 2 acres off of that. Make whatever bargain you want about the main property. Put a trailer on the smaller parcel so your tenant farmer has a home. Create a deal where the tenant has a path to ownership of the smaller parcel. You end up with a caretaker/neighbor who is your farm manager but still has a way to create his own farm and create equity.

Offering up your land for use to someone without a proven track record will prove to be a disaster. Farming is hard work requiring mastery in so many different areas to make profitable systems. Just growing food is not enough. You have to be able to get it sold at a profit.

Ken Peavey
steward

Joined: Dec 21, 2009
Posts: 2057
Location: FL
    
  43
Not stupid.  Reasonable and appropriate for the times.

The way I see it, the set up needs to be a long term partnership.  You need a farmer, the farmer needs a farm.
If the system crumbles and you relocate, it would be a while before you would have the skills to operate the place without your farmer.  You will also want to share in the benefits of relationships your farmer has formed with the locals during your absence.

If the housing were in place for 2 families, this could work out well.  One home for the farmer and his family, the other would be for you and your family.  For the length of the commitment needed, it would be prudent to consider more than unmarried farmers.  Perhaps you could rent out one of these homes to help with the money aspect of the enterprise.  

I was involved in a situation not unlike what you are describing.  While it was initially 'not about the money', it became 'about the money' real fast.  The plan went from 'develop an organic farm' to 'start an orchard' to 'can you start a salsa garden' to 'can you build some rooms in this barn' to me packing my bags.  Prudence demands a full understanding of what you pay for, what Farmer pays for, what is done with income generated, what is available for an operating budget, and spell out accountability practices.  Most importantly, what exactly do you want?

Next, while I like the concept, there needs to be a plan spelling out exactly what you want done with the property.  "evelop a sustainable permaculture type farm" just isn't good enough.   Is the place to have fruit trees, a pond, berries, hugelkulture beds, double dug raised beds, how much area?  What about livestock?  Is fence in place, who pays for the feed, is Farmer eating the livestock?  Are the demands realistic for the nature of the ralationship-by that, does Farmer work a full time job to cover his utility bills or is he a hired employee with a weekly salary plus housing?  Developing a sustainable permaculture type farm takes a fantastic amount of work.  Does Farmer put in 40 hours/week on the place?  What is the value of rent compared to a part time hourly wage?  How much can be accomplished working part time?  Is Farmer charged with construction of off grid systems and buildings or does he only focus on food production?  

Is Farmer's primary objective to develop a farm or to develop a survival doomstead?  You need to be honest with yourself and clear in your decision at this early stage because if its a doomstead you want, time is of the essence.  In the event TSHTF, and you move your family to the farm, you would want off grid systems, hardy livestock, diverse crops with open pollenated seed, and properly stored food in place.  For this, Farmer would need to be aware of current events and possess a wide range of skills.  

If the farm is the priority, Farmer would need more experience with marketing the products grown and handling the paperwork.  Your agreement would be oriented with a long term profitability motive in mind.  Wether or not it's about the money is moot.  It will be about the money.  Setting up such an enterprise from scratch aint cheap.  My estimate comes in at around $250k for those things I would want in place.  

The farm plan has a tractor, a truck, and an applicant with a clean driver's license.  He gathers business cards.  Stuff is grown and sold to offset payroll, insurance and production expenses.  The incentive to perform is cash driven.  Farmer is a disposable commodity, same with the land.  You'll want to be near a good market.

The doomstead plan has a team of draft horses, with a gene pool available locally, and a horse whisperer.  He gathers canning jars.  Stuff is grown, some sold, some saved for seed, some put into long term storage and kept rotated.  The incentive to perform comes from within.  Farmer is indispensable, same with the land.  You'll want to be near a small town in an area of independent people with good natural resources.  


Seed the Mind, Harvest Ideas.
http://farmwhisperer.com
S. G. Botsford


Joined: Oct 23, 2011
Posts: 62
How will the other expenses be split? 

E.g. if you are just providing the land, then all the hard work is his, as well as all the improvements. 

I would suggest in this case, you lease the land to him -- long term lease -- 100 years -- at a low rate.  He has an option to buy at your cost plus 10% plus cost of inflation at certain times -- say the 10 year aniversary.  If you want to move onto the land, you can do so, but you provide your own housing, utility.  Perhaps shared water.

20 years pass.  He has a nice farm.  You want to move there.  The two of you don't get along.

Or 20 years pass.  He gave up on farming, has a mobile home on the place, and has a automotvie junk yard.

Or 20 years pass, and he has a 2000 cow feedlot.

Choice:  He can buy YOU out for your cost +10% plus inflation.  You can buy him out for indepedently assessed valuation plus 10% - (your cost plus inflation)

But this gets spelled out clearly ahead of time.

You may want to tweak the numbers there.

Around here, raw, uncleared land, not in the city is pretty cheap.  I can get a quarter section 2 hours drive from Edmonton for under 100,000
 
 
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