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Developing a strong lease is an integral part of making a farm incubator program a success, but you might already be thinking ahead to what happens after you sign on that dotted line. How does this all play out in real life? What else should you keep in mind to make the arrangement work for everyone involved?
Luckily, we have a perfect case study to share with you. Farm Commons developed the sample lease in this packet in tandem with a lease written especially for an Illinois farmer to start up a farm incubator program in conjunction with a local farmer training organization. We were able to catch up with the folks involved to get a behind-the-scenes look at how this process played out for them.
Prairie Fruits Farm and Creamery (PFFC) is located in Champaign, Illinois. Owners Leslie Cooperband and Wes Jarrell opened up shop in 2003. Since then, PFFC has become famous for their creamy cheeses and traditional Italian gelato, both made with goat milk from their herd of Nubians, LaManchas, and Nigerian Dwarfs.
In 2013, Leslie and Wes partnered up with the Land Connection, a local nonprofit farmer training organization, to host the Farm Beginnings training classes at PFFC. After the yearlong program, Leslie, Wes, and Cara Cummings, the Land Connection’s executive director, were so pleased with the way things had worked out that they decided to take it one step further.
Cara of the Land Connection told us, “We started thinking bigger. Wouldn’t it be great if we could have an incubator program to provide some of our students with land? And what if we were doing it out here on the farm where we’re already doing our other classes? We are also out on the farm a lot through the program, so it would be more than just providing land access. We would be there for guidance and in case anything went wrong. And, the incubator farmers would be right there so they can continue to come to the Farm Beginnings classes, help teach classes, and be more involved in the program in general. It seemed like the ideal scenario.”
In 2014, Shea Belahi became the first participant in the incubator farm program at PFFC, leasing an acre of land to grow on for her own business, Heirloominous Farm. Shea had been a student in the Farm Beginnings program, so she
already had developed a relationship with Cara, Leslie, and Wes. According to Wes and Leslie, knowing Shea’s personality and already having a mutual trust and respect going into the arrangement was integral to their success.
Shea stayed on for her third season in 2016, and the program expanded to include three flower farmers on their own plots on the property. Additionally, PFFC is trying to work out an arrangement with the nearby town of Urbana to use a piece of land adjacent to the farm to expand the incubator program.
So what made this program such a success? We pulled together the top insights and tips from the team to share with you:
If you’re reading this resource, we don’t need to spend too much more time going over the importance of having a thorough, written lease. Even if you’re not thinking about legal enforceability or don’t feel that you need the formality of a written lease, the lease writing process itself offers a lot in terms of setting up the relationship with the tenant and ensuring that everything is out and on the table. In Wes’ words:
“The lease is more of an organizational document at the beginning for everyone to put everything on the table and say with formality at the beginning that
this is a lease contract, it’s not just random piece of paper that you sign without even really reading it. I think it’s critical at the beginning. I don’t think that we’ve referred to it once, but it was critical that we did it.”
Even in the smoothest of situations, things come up. Farming is unpredictable. For example, Wes and Leslie’s goats got out at one point and munched through some of Shea’s kale crop. But, because they had gone through the process of discussing all the possible scenarios and how they would be handled, Shea, Wes, and Leslie were able to navigate the situation easily.
“There was no awkwardness or animosity when things came up because they all knew that there was an agreement on
how things would be handled. The lease helped preserve the relationship between the landowner and farmer.” – Cara
Also important to note is that the lease has allowed the intermediary party, the Land Connection, to become virtually uninvolved past the initial program set-up. This is important when dealing with a situation with multiple relationships. If Shea and PFFC had to come to Cara to figure out what to do every time a question came up, the program might not have unfolded as organically as it did.
We mentioned this before, but Wes and Leslie stressed that working with farmers who you already know is their top tip for running a successful incubator program.
“If you have some history with the person or people that you’re going
to enter into this relationship with, that goes a long way. The lease and adhering to the lease would be more important or would come up more often if we were starting from ground zero with the person.” – Leslie
Be selective in whom you accept as an incubator farmer, and ensure that there is mutual respect and consideration. If you don’t already have a relationship with that person, Wes and Leslie recommend asking someone that you trust, like another farmer, to vouch for the potential tenant. In a situation where you are inviting someone onto your business property and often into your home, it’s important to get a sense of how they might behave in a variety of situations. Cara, Wes, and Leslie all knew that Shea was hyper-responsible and accommodating from working with her in the Farm Beginnings program. While there are never any guarantees, they expected that she would act the same way throughout the incubator program.
PFFC sells cheeses, gelato, and sorbets. They do not sell produce. The vegetable garden we mentioned before is only for their personal use and for some on-farm events. As a result, Heirloominous Farm’s product of fresh vegetables is not in direct competition with PFFC’s business. In fact, from Wes and Leslie’s perspective, having Shea on the farm added a whole new dimension to their own business and made their farm even more of an attraction. This allows the relationship to be more of a partnership than a tenancy—or landowner and lessee relationship—and encourages Wes and Leslie to find creative ways to support Shea’s business endeavors.
“We are trying to figure out ways to co-market with Shea and our other future incubator farmers. We’re thinking about putting a produce stand on the farm, and part of the idea would be to have the incubator farmers as the major players in the shop. That will help with their sales and retail experience and will help us to diversify the products that we can offer on the farm. It will also help the community because there aren’t any produce stands around. We’re surrounded by corn and soybeans. So it’s a completely beneficial situation for everyone.” – Wes
This is not to say that having an incubator farmer that has a similar business to your own would mean an unsuccessful program. But considering how to build a mutually beneficial business arrangement can strengthen the relationship between farmers.
The idea of a formal lease can be jarring to some farmers. Many farmers choose their profession so that they can get away from a corporate way of doing business and toward a more organic way of life. But as we can see from the situation described here, it is exactly the process of putting together the lease that allows for that natural growth of relationships. Ironically, putting a formal structure in place allows for flexibility and freedom. Having thought through all the possible things that can go wrong and how they will be dealt with means that there is no awkwardness when things do arise. The natural flow of the farm and the relationship between farmers is not broken. The process also sets a precedent for how circumstances will be handled in general and puts everyone on the same page. It almost seems counterintuitive—if a lease works well, you never have to look at it again. That is how it worked out in this case, at least. We are thrilled at the success of the farm incubator program that the Land Connection and PFFC developed and look forward to seeing its growth. We hope that this resource helps you build a strong program based on a solid lease as well.
Now that you’ve worked your way through this checklist you’re ready to put the lease in writing. But first, check out the Farm Incubator Lease that follows in the next chapter for sample provisions with detailed explanations to help you further develop the ideal lease terms for your scenario. Again, if you decide to draft your lease yourself, Farm Commons strongly encourages you to have an attorney look it over before finalizing it to make sure all the legal aspects are accurate and practical and that each provision complies with your state’s laws.
Once your lease is in place, it should go without saying that both parties need to follow through on the terms of the agreement. While the lease will operate as the determinative legal document to resolve disputes should they arise, Farm Commons sees a greater purpose in the lease-drafting process. Ideally, the lease will serve as a guidepost to facilitate open and clear communication and encourage each party to take seriously their roles and responsibilities in making each participating farmer’s operation and the farm incubator project overall a success.
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