The Young Farmer: Some Things He Should Know. Thomas Forsyth Hunt

The Young Farmer: Some Things He Should Know - Thomas Forsyth Hunt


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land. Possibly he invests his surplus earnings in stocks and bonds.

      It is not the present purpose to determine the relative merits of the different systems of land tenure, but to try to be helpful to the beginners by discussing the usual practices in order that he may know whether the arrangement he is considering is customary and whether it is likely to prove satisfactory.

      Every third farm in the United States is rented under one of three methods:

      1. A definite money rent may be paid, ranging from $2 to $6 an acre for land on which the ordinary, staple crops are raised. Perhaps $3 to $4 is more commonly paid for such land.

      2. In the South it is common for the landlord to require a definite number of pounds of cotton per acre or a certain number of bales of cotton for a one or two-mule farm, as the case may be. This is classified by the census authorities as cash rent, but will here be called crop rent. Crop rent is less common than either cash or share rent in the northern and western states, although perhaps the most common form in the South. Crop rent, however, is met with in some sections, as in western New York where certain large landowners require a definite number of bushels of wheat, oats or maize and make certain stipulations as to hay and straw. They charge a cash rent for pasture.

      3. Much the most common form of tenancy, however, is that where a certain percentage or share of the product is given the landlord for the use of the land.

      Before entering into a discussion of the customary conditions under which land is rented on shares it may be helpful to point out the fundamental differences between cash rent, crop rent and share rent. In case of cash rent, the landlord takes no risk, either as to the price or the amount of product. In the case of crop rent, he shares the risk as to the variation in price, but not as to the amount of crop raised. The latter may depend upon the clemency of the weather or upon the industry and skill of the tenant. In the case of share rent, both landlord and tenant share equally as to variation in the price and the amount of product.

      Three forms of share rent may be recognized:

      (a) Where landlord furnishes only real estate (land and buildings), the tenant supplying everything else, including teams, machinery, labor, seeds and fertilizers. Under these conditions it is customary for the landlord to receive one-third and the tenant two-thirds of the crop raised or the product produced.

      (b) The second form of share rent is where the landlord furnishes the real estate; the tenant supplies teams, tools and labor, while the landlord and tenant own equally all live stock other than teams, and bear equally all other expenses, as for seeds, fertilizers and cost of threshing. Under this system, it is customary for landlord and tenant each to receive one-half of all sales. As each owns one-half of all the live stock (teams excepted), each shares equally in all increase. The landlord pays for the cost of permanent improvements such as new buildings, fences, repairs and drainage. The tenant, in making these improvements, in some cases, agrees to furnish two days labor for one days pay. The theory is that, while the increased value of the real estate is of advantage only to the landlord, the improved facilities are of some benefit to the tenant. Since he can do this work at odd times when not otherwise employed, he can afford to take a generous view of the matter. It is obvious that if he remains on the farm long enough the tenant will come into his share of the benefit, while if he intends to leave the farm soon he may not. There is in the mind of the writer a prosperous tenant who, after eighteen years on a single farm, declared he had no desire to make a change, and doubtless there are thousands of similar instances.

      Under the plan in which the tenant furnishes everything except the real estate, the tendency of the farm is apt to be downward both as to the improvements and the crop-producing power of the soil. The interests of the landlord and tenant are not mutual. This condition of tenancy leads to growing only those crops which can be readily sold from the farm and to frequent changes of the tenant, with its accompanying auction sales of property. In one region, where this system prevails, it has been facetiously remarked that each tenant has a sale every year to determine how much he is worth. It is less trouble than taking an inventory.

      In the second form of share rent, the interests of landlord and tenant are more nearly mutual. Under this system, animal husbandry is possible, which, generally, involves pasturing and feeding a considerable part of the crops upon the farm, and even the purchase of nitrogenous by-products. All this leads to permanency of tenant, since the landlord and tenant are both interested in the live stock and other personal property, which cannot be divided, with economy, each year. It is interesting to note that the house is the least likely to be kept in repair. The improvement of the barns and fences or the laying of tile drains increases the landlords income, but he has no financial interest in the house, so long as the tenant is willing to live in it.

      There are, of course, many variations in the arrangement of details between the landlord and tenant. On many dairy farms in the northeastern states it is customary for the landlord to own the cows. While the landlord and tenant share equally from the sale of milk, butter or cheese, in such cases the increase in the herd belongs to the owner of the land. Hence, money from the sale of any animal, old or young, goes to him. This is because the landlord must keep up the herd. If a cow is sold, he must furnish another to take her place.

      (c) The third type of tenant farming is where the tenant furnishes nothing but his labor and managerial ability, and receives a share of the sales, which may be one-third. This is rather an unusual type of tenancy, since, where the landlord furnishes all the capital, it is much more common to employ a farm manager at a monthly wage. The wage varies greatly, but is seldom below forty dollars or above seventy-five dollars per month without board, especially to those who have not hitherto had much managerial experience.

      Assuming 160 acres of land, all tillable, devoted to dairy farming in eastern United States, gross sales may be estimated at $20 an acre, or an annual gross income of $3,200, and the net proceeds at $10 an acre, or $1,600. Under these conditions the young mans income would be $240, received as wages, plus $800, as his share of the net proceeds, or a total of $1,040 a year.

      Generally speaking, probably a more satisfactory method, both for landlord and the farm manager, would be to pay the latter as nearly as may be what his services should be worth and give him in addition one-half the profits; that is, one-half of that which was left after deducting the expenses of running the farm and interest on the capital invested.

      Merely for illustrating the method of calculation, let us assume this farm with its equipment to be worth $100 an acre, or $16,000. Let the farm manager be paid $840 a year. Assume the same gross income, $3,200, and the same cost of operating, $1,600, to which add $600, the additional salary of the manager. The total expense is then $2,200, and the net proceeds $1,000. If 4%, or $640, was charged on the investment, there would be $360 to be divided between landlord and manager, making the salary of manager $1,020. A simple calculation will show that if 5% were charged, the salary of the manager would be $940 a year, and if 6%, $860 a year. The advantage of the latter method of employment is that the young man runs less risk, while both receive equally any surplus beyond fair wages and fair interest on the investment.

      In this connection it is important to consider how much may be reasonably paid for managerial ability. A study of the figures on page 133 will show that the labor income from a considerable number of farms of the better class was about 7% of the capital invested in the farms. The inference is, therefore, that if a man has $10,000 wisely invested in a farm he may pay $700 for a working manager; or, to put it in another form, before the owner of a farm can afford to pay


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