Creativity unlocks win-win solutions
These two southern Alberta producers are farming each other’s land – and loving it.
Farming is competitive, to be sure. So just who are you competing against?
To some, a neighbour can be a source of competition: for quality land, scarce labour, better input pricing, superior production results and unspoken local bragging rights. Lethbridge, Alta. area farmers Jake Schutter and Randy Penner were long-time neighbours – friendly but not close – with Penner’s 960 acres mostly surrounded by Schutter’s 3,000 acres. Three years ago, unknown to the other, each was facing a challenge.
Penner was growing cereals and dry beans under irrigation, unhappily coping without needed help in the form of off-farm labour. He wanted to grow more profitable hybrid canola seed under contract, but strict one-year-in-five rotational requirements meant his land base would severely limit the opportunity. Schutter, meanwhile, was among the largest potato growers in the area. His issue was the lack of suitable irrigated land to rent at a reasonable price.
During the course of a neighbourly chat one day, the two discussed how difficult it is to find more land and keep good help. At that moment, Schutter recalls, “We saw the light.” By selectively farming each other’s land, both could achieve what they wanted: rotational elbow room for Penner and well-priced rental acres for Schutter.
Nuts and bolts of land-share agreement
Each year, Penner and Schutter swap up to six quarter-sections of land. The arrangement, while unconventional, makes sense on several levels. “They grow potatoes on my land, and I grow hybrid canola seed on theirs,” says Penner, who explains that the agreement is governed by several important agronomic stipulations. Creativity unlocks win-win solutions, continued from front cover Each uses the other’s irrigation equipment and is responsible for pumping costs and any repairs needed to the equipment during the course of the growing season. Penner keeps his canola seed company informed about the land agreement, with Schutter asked to certify that seed grown on his land is property of the seed company. Mindful of possible chemical conflicts, notes Penner, “We talk about herbicide use all the time.”
Penner can now grow up to six quartersections of canola seed each year on clean, well-fertilized land. If he were limited to his own land, and hemmed in by rotational requirements, he says he’d be lucky to manage one or two. Without Schutter’s land, Penner isn’t sure he’d still be farming. With it, he’s feeling good about the future.
“I’m very optimistic,” he says. “I’m able to do everything myself now, so I’m enjoying myself.”
Schutter was attracted to this deal first and foremost because he likes Penner’s land. “Canola seed growers also have to keep the land clean and well-fertilized,” Schutter says. “It’s tough to get good potato land, because if people think you’re making a lot of money, they’ll want a lot of rent. To gain access to land, you have to offer more than rent.”
Having access to Penner’s land has also allowed Schutter to give his own crop rotation some breathing room. Some of his land hasn’t seen potatoes in as much as six years, setting him up for high-yield production in the future.
Financially, the arrangement allows each party to maintain a specialized equipment lineup, avoiding the cost of equipment needed to grow non-core rotational crops. By specializing in potatoes and hybrid canola seed, respectively, Schutter and Penner have an opportunity to maintain higher per-acre returns than with less-desirable rotational crops.
The spirit behind the agreement
This year, pleased with their respective results, Penner and Schutter signed a new five-year agreement to take them through to 2011. Prudently, they had the agreement drawn up by a lawyer. According to Schutter, however, any such deal is only as healthy as the spirit of co-operation that lies behind it.
“We have a long-term agreement that we’re happy about,” he says. “You have to respect each other. You have to have the feeling that it’s good for you and you enjoy the fact that it’s good for them as well. We don’t trip over the little stuff, and we absolutely want to hear from each other. Good, honest communication is paramount.”
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