An economic analysis of agricultural land leasing with an emphasis on the interface of leasing and conservation practices in Nebraska and South Dakota

The leasing market for agricultural land is significant in Nebraska. This study was conducted to evaluate agricultural leasing arrangements and the relationships these arrangements have upon land use management and conservation practices. The results provide a comprehensive benchmark of the cropland leasing market and its participants and provides substantial insight into issues of stewardship on leased land. An estimated 44 percent of the total farms in Nebraska is leased. Share and cash leases dominate the market but cash leases are gaining in popularity. The cropland market relatively local market in nature, is a comparably stable and informal market, and still it is relatively complex market. Results of this study reveal that agricultural leases are generally economically efficient and equitable. Within the sub-state areas, predominant share arrangements exist which are influenced by crops grown, the presence of irrigation, perceived yield variability, and general preference patterns and customs of both landowners and tenants. The Revised Universal Soil Loss Equation was used to predict soil loss on leased tracts in Nebraska and South Dakota. These results suggest that agricultural producers appear to be stewarding the land they operate, regardless of ownership status, in an environmentally conscientious manner. Tenant respondents in this study indicated that environmental interests and conservation practices on land they own and land they lease are essentially one in the same. Respondent tenants perceive community norms and social pressures to farm leased land as they would their own. Reputations and perceptions of individual tenants matter. This, coupled with their own beliefs and values concerning production agriculture and long-term resource management is reflected their production practices. These findings suggest that government-sponsored conservation programs do not necessarily need to tied to program participation but rather with a more positive attitude of partnering with producers who already have conscientious stewardship practices in mind. Public education may be the key to managing agricultural land resources for the societal good