Evaluating Land Tenure Systems in Louisiana Cotton Production for Grower Profitability

Rising production costs have forced many cotton producers to renegotiate their crop share rental agreements with their landlords as a means of increasing producer net returns per acre. By evaluating different share rental agreements and the degree in which production costs are shared, equitable crop rental arrangements can be achieved for all parties with a vested financial interest in the crop. The objective of this study was to examine the affect of alternative land tenure arrangements on net returns and risk to the cotton producer. Preliminary survey results from April 2009 provided data on the amount of cotton acreage and rent mechanism from East Carroll, Morehouse, and Tensas Parishes. A financial simulation model was constructed to examine market returns over common share rental arrangements in Louisiana, near-by futures prices, and forecasted 2009 parish yields while comparing the risk measure of the grower in each arrangement.