Sullivan says the risk reduction on leased acres depends on how the rent is structured. Cash rents mean higher COPs on this land, both fixed and entrance fees. Producers then need higher levels of insurance and separate insurance on these hectares, and that is where private insurance such as THE GARS agrees, the gap between what is needed and what government programs can offer. This is especially true for young farmers who are trying to enter a market with few opportunities to buy land. Sullivan points out that in the United States, half of the land is leased and many farms are 100% leased in Europe. He sees that Canada is moving in the same direction, which means that young farmers will need a new way of accessing credit, perhaps by using insurance as collateral. One of the drawbacks of leasing is a lack of credit for the tenant, who usually has a more difficult time to obtain medium- and long-term loans than the landlord. Lenders need a country as collateral; Leased land does not build equity. In fact. So the rental country works for landlords who are on the return of investors in an otherwise weak investment market, but how can those who rent it allow princely growth and growth? This is a question that is in mind, as the competition for the available land becomes fierce and not always friendly, the days of rental almost exclusively by family and neighbors end quickly. There are many risks for those who rent a lot of land, and the potential for a big setback if a farmer prepares with machines for those extra acres and loses them. “At the end of the day, the land contract has to allow the farmer to make a profit so that it can`t be an emotional decision,” Gervais says.
“It needs to be part of a bigger strategy and be made objective.” “The FCC Farmland Values Report shows that there are generally fewer (country) transactions,” says Gervais. Demand has slowed somewhat, but I think it is more a question of supply, because the profitability of land ownership relative to investment. “At first glance, the rent decision should be based on margins,” says FCC`s Gervais. “I`m making a profit from this country. Obviously, it`s more complicated than that. It`s not that static. In Saskatchewan, this figure is even more important, as leased acreage increases to 27 per cent of total land area. As Ken Evans says, larger farms are leased in the province, while smaller farms of 1,500 to 2,000 hectares lease theirs.