If you have a small farm and are looking to expand , there are various ways you may be able to achieve that . Business expansion for small or lifestyle farmers can take place in many forms , including : 1 . purchasing additional land ; 2 . agistment ; 3 . share farming ; or 4 . leasing additional farmland . Leasing land for small farm expansion

We will briefly go over each of these options , before delving deeper into the fourth one : leasing land to expand your small farm or hobby / lifestyle farm , and the considerations when entering into a farm land lease agreement .

Buying farmland Purchasing more land is the most obvious option . However , it comes with a major downside , namely the need for large capital injections from either your own funds or from a lender like a bank . Buying farmland also has advantages , of course . For example , it allows you to make long-term plans for improvements on pastures and infrastructure to your own standard and desires . Agistment Agistment , the second option that we will briefly touch on here , is an opportunity that may be available to some small farmers . Agistment is normally a short-term practice , arranged via a verbal

agreement , that can be terminated at any time by either party . Compared to leasing farmland , agistment is paid at a different rate , usually on a per-head basis rather than a whole-of-area basis . Share farming The third option we have included here is share farming . This is an arrangement between the owner of the land and a share farmer who operates their business on that land , with the profits from the venture split between the two parties . There are many different ways that the share farming agreement can be negotiated . For example , for a conventional cropping enterprise , the agreement could be that the land owner would supply the land and the share farmer would supply all machinery for the preparation , planting and harvesting of the crop . They would then each pay half the costs of the seed , fertiliser and chemicals . Leasing farmland Leasing of land can be defined as a financial agreement or arrangement where the land is rented for an extended period . In many cases that may be for 3-5 years , although the length of the land lease agreement is variable depending on the circumstances of both parties . Historically , farm leasing agreements were based on the potential income-earning ability of the property or area to be leased . In more recent times , this has changed to a percentage return on the property or land value .

Advantages of leasing land

Leasing farmland has many advantages for both the lessee and the lessor . For the lessor , one of the main benefits is being able to stay in their home and still derive an income , without the need to do the physical work involved in farming . This is particularly attractive to farmers who are nearing retirement but don ’ t want to move to a different location . It can be a way that a landowner can work off-farm and have someone run the farm for them , while still deriving an income from the land .

There are also many lifestyle farms that can be leased . Often , the owners who purchased the farm love the area , but don ’ t have the experience or desire to run the property as a commercial enterprise , so they benefit from leasing the land to another farmer .

For the lessee , one of the main advantages of leasing land is the ability to more easily increase the size of their business . For small or lifestyle farm owners in particular , in areas with high capital costs of land ownership , this is one way of increasing their business size without the need to make a sizeable capital investment .

Land lease agreement considerations

There are a number of considerations that need to be made before signing a lease for farmland . In most cases , the land owner , or lessor , will supply the land , buildings , water infrastructure and fencing . The lessee generally agrees to supply the livestock or machinery for