Farmland Rental Contracts: Why Do Some Contracts Stipulate Production Practices in Ontario and Manitoba?

Abstract

In 2011, 42% of Canadian farmland was in the rental market. Some of these rental agreements include stipulations that a tenant implement certain production practices. This thesis empirically investigates factors that motivate stipulations by analyzing a telephone survey data set of farmers in Ontario and Manitoba (n=441). Based on the empirical findings, I conducted an additional personal interview to explore issues associated with stipulations (n=59). The empirical results identify key covariates that influenced the adoption of stipulations. For example, farmers renting from family members are less likely to have a stipulation in their rental contract. The personal interviews also reveal that many landlords ask tenants to avoid specific production practices that may limit future uses of the land for non-agricultural purposes. Hence, in regions with high urbanization pressure, landlords may stipulate practices that are in potential conflict with social objectives as set forward by the government.