Who Is This Workbook for?

Are you a landowner, farmer, or advocate for farmland conservation who has a long-term vision for a piece of land? Perhaps this vision includes restoring the land’s ecological balance, securing some diversified income, building a thriving farm operation, creating a rewarding livelihood, or leaving a legacy for future generations. The long-term agroforestry lease offers one potential solution for folks who are willing to collaborate and commit to making such visions a reality.

Why long-term leases?

A long-term lease presents a win-win situation for farmers and landowners. Beginning and experienced farmers alike seek long-term access to land; however, many don’t have the funds to purchase land outright. The long- term lease allows the farmer to secure long-term land tenure without requiring a lot of money upfront. Long-term leases are particularly key for farmers engaged in agroforestry ventures, as perennial woody crops inherently require an extended time before becoming productive. The farmer thus needs predictable and long- term land access to make any arrangement worthwhile.

Owners of agricultural land—whether they’re aging, absentee, non-farmers, only cultivating part of the land, or are otherwise wanting to join forces with another farmer—often want their land to be taken care of or used for farming practices but don’t have the time, resources, or desire to do it themselves. Perhaps they need additional income as well. The long-term lease allows them to secure a long-term tenant who they can count on, as well as supplemental income from rent. By prescribing sustainable and conservation-oriented farming practices, a long-term lease can also help facilitate ecological restoration and protection of the land for the benefit of their heirs and future generations.

Why are we focusing on agroforestry?

Agroforestry is showing great promise in advancing sustainable land use practices, more resilient local food systems, and economic prosperity for individuals and communities. It’s been gaining momentum in certain pockets of the United States. This workbook offers
an overview of legal considerations for long-term leases that address key particularities of agroforestry.

What Is Agroforestry?

Agroforestry is a suite of practices and tools that involves intentionally integrating perennial trees and shrubs into traditional crop and animal farming systems. This innovative land management approach of blending forestry and agriculture can enhance productivity, profitability, and environmental stewardship of the land. Agroforestry is thus a promising tool for farmers, ranchers, landowners, and others who share an interest in protecting natural resources, creating profitable farming operations, promoting sustainable and conservation-oriented land use practices, and developing more resilient food systems.

Agroforestry creates opportunities for landowners, farmers, and communities by supporting:

• sustainable farms, ranches, and woodlands
• diversified income streams for farmers and landowners
• healthy and sustaining jobs
• clean air and water
• preserved forests and working lands
• protected wildlife habitat
• enhanced soil health
• safe and healthy food sources
• local and regional food security
• energy conservation
• carbon sequestration
• resilience to floods, droughts, and other effects of climate change
• bioenergy production
• increased prosperity in rural communities

The suite of agroforestry practices and tools are ever evolving. The following highlights a few of the many specific practices that are commonly used in agroforestry operations today:

Silvopasture: This practice involves integrating forestry and grazing in a way that mutually benefits the forest and the domesticated animals. Benefits to the landowner and farmer include enhanced soil quality as well as increased long-term income from the joint production of trees and grazing animals—including pasture-raised animal products (meat, dairy, and eggs).

Alley cropping: Food, forage, or specialty crops are grown between rows of trees. Alley cropping can help prevent erosion, provide protection to the crops, and help to diversify farm income.

Riparian buffers, hedgerows, and windbreaks: These practices involve creating a vegetated area made up of wild shrubs and trees as a buffer strip. The buffer strip could be used to protect streams, rivers, and lakes (i.e., riparian buffers) or other areas such as roads or fields (i.e., hedgerows and windbreaks). They can play a key role in increasing water quality as well as shielding crops, native habitats, and even roads from adjacent land uses. In agroforestry, such vegetative buffer strips often include the incorporation of edible crops, which again helps to bring in additional farm income.

Forest farming: The landowner leases a woodlot for mushroom or other native wild food and forest production. Forest farming provides yet another opportunity for diversified income while preserving the native state of the forest.

The high-value perennial species that can be cultivated in an agroforestry operation are innumerable. The following highlights some common types of trees and shrubs that are being incorporated into agroforestry ventures here in the United States:

Nut trees and shrubs: Black walnut, chestnut, hazelnut, and pecan
Fruit trees and shrubs: Apple, cherry, cranberry, currant, elderberry, gooseberry, grape, hawthorn, juneberry, mulberry, pawpaw, plum, and raspberry
Hardwood trees: Black walnut, ash, maple, and oak
Softwood trees: Cedar, fir, juniper, pine, poplar, and spruce
Herbs and other specialty crops: Asparagus, dandelion (root), ginseng, goldenseal, and mushrooms

Agroforestry has been practiced for centuries by traditional and indigenous communities in the United States and around the world. Contemporary farmers and scientists also continue to develop innovations to make agroforestry more productive, profitable, and ecological. In 2011, the USDA released the Agroforestry Strategic Framework to support the science and adoption of agroforestry. Eight USDA agencies—including the Forest Service, Farm Service Agency, Natural Resources Conservation Service, Rural Development, and Agricultural Marketing Service—make up the USDA’s Agroforestry Executive Steering Committee. They are working with farmers, landowners, and other stakeholders throughout the country to expand the knowledge and integration of agroforestry practices. Widespread adoption and support of agroforestry can help ensure the long-term health and sustainability of lands, local economies, and food systems for current and future generations.

The long-term, intricate, and place-specific nature of agroforestry requires the parties to the lease—the landowner and the farmer—to co-create unique norms and standards that will govern the long-term arrangement. Understanding upfront the vision, commitments, inputs, and benefits involved is a great place to start.

The tenant farmer’s vision, commitment, and benefits

The farmer typically brings a vision to restore the land and implement ecologically sound agricultural practices. He likely also aspires to establish a livelihood and build a profitable business. He’s committed to the long haul, because he’s not relying on the relatively immediate returns of annual crops. In this sense, he has more vested in the venture than a tenant farmer who is engaged in a traditional annual farming operation.

The upfront investment required for an agroforestry venture can be quite significant. It includes purchasing and planting a large number, and possibly wide range, of fruit- and nut-bearing trees and shrubs and other perennial plants. It will take years for many of these perennials to mature enough before the farmer collects any significant yields and resulting profits. The upside is that once the yields are established and consistent, the farmer can maintain a profitable venture with relatively little ongoing input and energy. The trees, plants, and nature do much of the work for the years to come. As any farmer knows, this is a huge boon.

The landowner’s vision, commitment, and benefits

The landowner may share a vision of sustainability and commitment to stewardship of her land. Or, perhaps she is more intrigued by the consistent income from rent and considers the ecological benefits for her heirs and future generations as a plus. Regardless, the landowner also carries a heightened stake in the success of the agroforestry venture. By nature, the trees will inhabit the property longer than annual crops. The landowner thus needs to commit for an extended period, at least beyond just a season or single year.

Depending on the preference of the parties, the landowner may take a very hands-off or very hands-on approach in running the agroforestry operation— or somewhere in between. To whatever degree the landowner is involved, her commitment to the long-term lease will likely reap rewards. The property’s value has potential to increase due to the improved soil and ecological balance. The increase in value will of course depend on various factors, including the size and location of the parcel, the suitability for row crops, development demand, what kind of trees and how they are spatially arranged, and so on. Regardless, the landowner will benefit from consistent rent payments and possibly enduring profits from the established yields of mature perennials long after the lease ends.

What does each party have to offer?

In addition to bringing a vision and commitment to the table, both parties also have something tangible to offer. Generally, the farmer brings knowledge, skills, and time. The landowner brings access to and use of the land. Perhaps the landowner may also bring some of her own talent, time, equipment, or initial funding.

An agroforestry venture typically involves a significant investment upfront. This raises fundamental questions, such as:

• Who pays for this upfront purchase of trees?
• How is this initial investment accounted for in the lease or rent arrangement
• How is the value of mature trees accounted for at the end of the lease?

The arrangement may also involve the introduction and management of livestock.

• Who is responsible for taking care of the livestock and who brings these skills?
• Are there specific animal husbandry practices or standards that the parties must abide by?

Typically, an agroforestry venture also embodies a vision and sensitivity toward the long-term ecological and value-added benefits for the land.

• Who brings this knowledge?
• How are conservation and ecological issues addressed in the lease so that the parties are all clear on the vision, objectives, and outcomes?

Determining who brings what at the outset and how it’s all accounted for is a key element that the parties must discuss, negotiate, and agree upon before solidifying a lease arrangement.

What are the shared benefits for all?

While a successful arrangement requires shared visions, commitments, and inputs, both parties have potential to benefit immensely from the arrangement. It can be motivating to reflect upon the benefits throughout the process.

Reflection

Both parties can begin the process by asking themselves and reflecting upon the following:

• What are your overall visions and goals for the long-term lease arrangement?
• Describe your level of commitment to the long-term lease arrangement.
• What inputs do you have to bring at the outset (talent, time, money, other)?
• What inputs do you hope the other party will bring (talent, time, money, other)?
• What are the main short-term and long-term benefits you aspire toward (for yourself, the land, the other party, the greater community, anyone else)?

The process of creating a long-term lease can be broken down to four steps:

1. Understanding your goals and options
2. Developing and negotiating specific terms to meet your goals
3. Getting the lease agreement in writing
4. Following through with the lease agreement

Understanding your goals and options

Identifying your central goals and objectives can help ensure you stay on track along the way and that whatever overall arrangement you agree to is aligned with your ultimate vision. This step may require initial research to confirm that a long-term lease is your best option. It can be helpful to start by asking around: What are other people with similar goals and objectives doing? A good place to start for farmers would be local extension agents, farmer advocacy organizations in your region, as well as other farmers who you come across at various gatherings, workshops, conferences, or even farmers’ markets. Landowners can also inquire with extension agents as well as land trusts and even real estate agents who may know of farmers looking for land.

The second section of this workbook—”Getting Started: Questions Answered on Basic Legal Considerations Involved in a Long-Term Lease”—can also help you with this initial research. It walks through the high-level differences between leases, licenses, and easements and compares long-term and short-term leases. It also highlights foundational legal issues that may come into play if and when you determine that a long-term lease is the preferred option. These include the importance of getting a lease in writing, the possibility of state-specific restrictions involving long-term leases, potential tax and financial implications, as well as determining how the value of the perennials are accounted for throughout the lease. These are all important elements to understand before entering a long-term lease arrangement. But don’t be intimidated! The ultimate purpose of this workbook is to help landowners and farmers understand these key issues and better navigate the legal landscape of long-term leases.

Developing and negotiating specific terms to meet your goals

The next step is to start contemplating the specific terms of the lease. These include obvious aspects such as:

What’s the rental price?
What’s the length of the lease?
Who are the parties?

It also includes more nuanced aspects such as:

Does the tenant have exclusive use of the land?
Does the tenant have an option to buy the property if it ever goes up for sale?
Are there any prohibited activities?
Does the tenant have the right to use equipment and buildings? And so on.

The third section of this workbook—“Checklist: Walking through Key Elements of a Long-Term Agroforestry Lease”—serves to help parties to the long-term lease determine specific terms of the lease. It lists key issues, small and large, that a long-term lease should address. It includes a brief explanation of the significance for each as well as a list of key questions to guide the parties in figuring out how you want to address the issue. It’s not always easy to come to a resolution on all the issues all at once. This process can be time consuming. It can also be awkward as it requires discussing tough issues and decisions around various worst-case scenarios, such as death or even hostile disputes. The key to a successful lease is open communication and dialogue upfront. Discussing the worst-case scenarios at the get-go can pay off huge rewards over the long run. The parties are more likely to be on the same page and to know what to expect throughout the duration of the lease, particularly if and when a worst-case scenario arises. Better yet, it helps prevent disputes from arising in the first place.

Getting the lease agreement in writing

Getting it in writing is essential

A written agreement may be required for the lease to be meaningful and enforceable in court. This is discussed more in Section 2’s Q&A—Why get a long-term agricultural lease in writing? Just as much or more important than legal enforceability is that going through the drafting process and having a comprehensive written agreement in place ensures the parties create a shared
understanding. Not only will it ensure the key terms are clearly addressed, it helps prevent forgetfulness and misunderstanding should an issue or dispute arise. The parties can thereafter turn to the agreement, and the answer will be there. In the ideal scenario, the parties will never have to refer back to the agreement because they have cultivated mutual understanding and open communication through the negotiation and drafting process.

With this in mind, the best written agreements are those that are thorough and specific to your particular circumstance. The agreement as a whole addresses solutions and approaches to a wide range of scenarios—or “what ifs”—such as what if the parties die, what if the land is sold, or what if the farmer doesn’t pay rent on time. The terms are also specifically adapted to your unique operation.

Your lease agreement should be specific to your arrangement

There are hundreds of agricultural lease templates and sample leases out there that can be quickly found and downloaded for free on the internet. It may be tempting to simply copy and paste and fill in the blanks. But beware! Most agricultural lease templates include norms and standards that are designed for commodity farming operations. Agroforestry farming operations are unique. Most are diversified farms that involve multiple crops and operations—value-added, nurseries, livestock, fruits and vegetables, perennials, direct-to-consumer, agritourism, and so on. The intricacies of agroforestry and diversified farm ventures require more issues to be sorted out for the lease to be effective, the relationship to be functional, and the venture to be successful. It’s not as cut and dry as a farm operation involving monoculture crops that simply need some land for planting and harvesting. Leases involving an agroforestry or diversified farming operation must be adaptable; they are meant to accommodate unique and individual circumstances.

This workbook includes a sample long-term agroforestry lease to help farmers and landowners solidify an effective written lease agreement. A good approach is for the parties to separately and then together walk through the checklist and the sample long-term agroforestry lease as a guide, carefully noting the specifics for how they want to address a particular situation or issue. The sample lease includes annotations to help explain legal aspects and the significance of key terms or sections of the lease.

The sample agreement in this workbook is not comprehensive, nor will it meet the needs of any and all long-term agroforestry lease arrangements. Rather, it is a starting point, and serves to meet the growing need to further develop new standards and norms for long-term leases in the agroforestry and diversified farming context. This sample agreement is not intended to be a template. Do not cut and paste, in whole or in part! The best lease agreements will be those designed specifically for the unique situation of the parties.

The parties should consult with an attorney—working through this workbook will make the process more efficient and affordable

While the parties can begin the drafting process themselves, Farm Commons strongly recommends working with an attorney who is familiar with long-term agricultural leases. Long-term leases involve complex and state-specific areas of law. Having a lease with unlawful, conflicting, or confusing sections or terms can come back to haunt you, as it will likely lead to confusion and dispute. Working with an attorney who is skilled at drafting a coherent and effective lease can help prevent a lot of headaches.

An agreement is like a puzzle. All the pieces need to seamlessly fit together. If one section of the lease is a mismatch with another, the whole agreement could lose its effectiveness. It can be hard to catch conflicting sections without a keen legal eye. That’s where an attorney can step in. Doing the research and legwork upfront by working through this workbook can help make your time with an attorney more efficient and affordable. If you’re willing to commit to the long-term nature of the lease, and see the potential upsides, you’ll realize that it’s worth the time and money to do it right at the get-go.

Follow through with the terms

While it goes without saying, the parties need to follow through with the terms of the lease throughout its duration. From a legal perspective, if the terms aren’t followed on a consistent basis, the other party could argue that the lease is effectively null and void. More significantly, honoring the terms helps sustain a healthy and respectful relationship between the parties. You can quickly lose the respect of the other party if you begin disregarding the terms that you agreed to, even the small ones. Over time, the littlest of frustrations can add up to a full blow out.

Open and ongoing communication is an optimal way to ensure that issues are discussed and resolved early on. If a problem or issue arises, the best approach is to talk through it rather than ignore it hoping the other party doesn’t say anything. Ideally, the parties can resolve issues when they arise and move forward, preventing the parties from ever going to court. Leases can also be modified through an amendment process if needed.

The Savanna Institute: Laying the groundwork for agroforestry expansion in the Midwest

The Savanna Institute is leading the charge in advocating and supporting agroforestry efforts in the midwestern United States. The 501(c)(3) nonprofit organization was formed in 2013 to develop agricultural systems that mimic an exceptionally productive ecosystem once common throughout the corn belts and bread baskets of the world: the savanna.

Oak savanna was the primary pre-plow ecosystem across the Midwest, with park-like scattered canopies of nut-bearing trees, understories rich in fruiting shrubs, lush ground cover of grasses and flowers, and periodic fire and large grazing animals maintaining diversity and productivity.

Agricultural savannas follow this pattern, but are designed and managed to grow valuable crops, thereby producing food, fuel, and fiber while restoring soil, water, climate, and biodiversity resources. This ecosystem-mimicking agriculture adapts diverse agroforestry practices, including alley cropping, silvo-pasture, edible buffers, and forest farming. It also draws ideas and techniques from aligned fields of agroecology: organics, permaculture, holistic management, Fukuoka’s Natural Farming, Smith’s Tree Crops, Jackson’s Natural Systems Agriculture, and others.

A pivotal goal of this emerging paradigm is to replace annual grains grown in monoculture—which supply the bulk of the human diet and commodity demand—with perennial crops grown in polyculture with integrated livestock. Eaters increasingly demand healthy food systems that restore ecosystems, and they are developing tastes for emerging crops that can be grown in agroforestry systems, including chestnut, hazelnut, elderberry, pawpaw, and currants. While farmers have pioneered cultivation and market development of these and other such perennial crops, they remain underutilized and underdeveloped. The Savanna Institute exists to help advance the research and education necessary to grow and market these crops in integrated systems alongside other more established perennial crops, such as pecans, apples, grapes, cherries, peaches, raspberries, asparagus, and pasture-raised animal products.

To explore the potential of savanna-based farming to become ecologically sound, agriculturally productive, and economically viable, the Institute runs a Case Study Program that works with farmers across the Midwest. The study involves the conversion of these farmers’ working farmland into commercial-scale agroforestry operations. This research program is cooperative and participatory: Scientists and farmers work together to collect and share information concerning the economic, ecological, and social impact of diverse agroforestry practices.

The Savanna Institute is building a network of landowners and farmers who are interested in participating in their Case Study Program or simply learning more about the opportunities in perennial agriculture. At www. PerennialMap.org, they are connecting landowners and experienced farmers for the expansion of agroforestry throughout North America. If you are a landowner who is ready to transition your land into more ecological agriculture, or if you are a farmer seeking land for perennial crops and pasture, be sure to contact the Savanna Institute! Visit their website—www. savannainstitute.org—for more information and to sign up for their mailing list. If you farm in the Midwest, you can also complete an application to participate in the Case Study Program. For specific questions contact Keefe Keeley, the executive director—info@savannainstitute.org.