Determining Equitable Share Lease Agreements for Farms With Sub-surface Drip Irrigation on Cotton in the Texas High Plains

The rapid adoption of sub-surface drip (SDI) irrigation technology in the Texas High Plains has fostered the need to evaluate the terms of share lease agreements for land on which these systems are installed.  Most of the early systems were placed on land owned and operated by the farmer.  Increasingly, systems are being installed on land owned by someone other than the operator.  In the Texas High Plains, the majority of land is rented under share lease agreements between landowners and the tenants with the landlord providing the land and some percentage of the yield enhancing inputs in exchange for a percentage of the gross crop receipts.  With the high capital investment required for SDI systems and an apparent yield increase, a new agreement will likely be necessary to provide for equitable treatment of both the landlord and tenant.  This study compares the most popular current share lease agreement with the alternatives of various shared percentages and cash leasing using the FARM Assistance program on a typical model farm.  The Share Rent Analyzer, developed as part of the South Plains Cotton Profitability Project, was used to determine the alternative percentages to be analyzed.