USDA REOPENS COMMENT PERIOD ON LEASE AGREEMENT RULE
WASHINGTON, Dec. 18, 2007 – In response to public requests, the U.S. Department of Agriculture has reopened the comment period on its proposal to standardize leases with variable or flexible provisions.
The original comment period ended Nov. 27, 2007. USDA will now consider comments received through Thursday, Jan. 17, 2008.
Market trends and an increased use of flexible or variable cash leases make it necessary for USDA to review the current program rules. At issue is whether regulations governing whether a lease is considered "cash-rent" or "share-rent" for a USDA program purpose need to be revised or defined more specifically. This affects leases that have provisions under USDA's Farm Service Agency (FSA) and Risk Management Agency (RMA).
Current program rules do not prevent tenants and landowners from taking advantage of various types of leases to adjust to changing market conditions. However, the agreement between them, which has sometimes been an oral agreement rather than a written lease agreement, determines whether they have created a "cash-rent" or "share-rent" agreement for USDA program purposes.
But before taking any action, FSA and RMA will review the comments on the current rules governing "cash-rent" and "share-rent" provisions, especially examining variable and flexible leases.