FAIR Lease Development & Monitoring Service A flexible lease solution that works for landowners and producers

Primarily for landowners who want to retain their current tenant, but want a fair return based on the productivity of the farm Don’t want to overcharge tenant Understand potential for a wide range of return from production and greater risks on the farm Willing to share risk between landlord & tenant Desire to increase rent if price and/or yields are good – share good returns when applicable Ideal for beginning farmers Why the FAIR Lease?

The FAIR Lease provides a reasonable “base” rent for the farm Set at or slightly above county average rental rates The base rent is a negotiable figure The base rent is also a minimum rent for the farm There is a “flex” rent portion of the lease The flex percentage is also a negotiable figure Based on a percentage of gross income less variable input costs and less the base rent We use ISU Extension cost of production figures How does it work?

US Farm Lease will monitor the lease In other words, USFL keeps track of predetermined market prices and collects actual yield data from the tenant after harvest USFL calculates the “flex” rent USFL invoices the tenant for the “flex” rent USFL compiles a report of how the FAIR Lease worked for the crop year Very simple for the landowner Monitoring -- Simplicity

Both the landlord and tenant know what the base rent, flex rent and total rent for the farm will be under various prices/yields BEFORE they sign the lease Tenant required to carry 80% Revenue Protection Crop Insurance to protect return potential for the farm Any insurance indemnity will be added to gross farm income for the year The FAIR Lease can be set up to “auto-renew” from year-to-year The FAIR Lease helps to build long-term relationship between landlord and tenant Aspects of the FAIR Lease

Landlord Advantages Disadvantages Better rental rates if prices/yields are good Builds relationship with tenant Base rent may not be as high as market-based cash rental rates Flex payment subject to price and yield risk Not all rent paid in advance of the crop year

Tenant Advantages Disadvantages Lower base rent Shared price and yield risk with landlord Landlord may get better return and thus willing to spend more on improvements Builds relationship with landlord Have to share income with landowner when prices/yields are good Need to provide yield and crop insurance data to landlord

Story County, Iowa $300.00 base rent Up $50.00 from 2011 Flex percent of 20.0% Flex will vary between corn and soybeans due to gross return differential FAIR Lease Example

FAIR Lease Example

Comparing And Selecting The Base Rent And Flex Percentage

Thanks For Your Interest in our FAIR Lease ! For more information, please contact us by phone or e-mail. US Farm Lease 877.232.4002 56722 241st Street Ames, IA 50010 info@usfarmlease.com