For international considering investing in agricultural land in Uruguay or landowners who wish to change their current farm management arrangement, it might be good to have more insight in the possibilities of farm rental agreements.
In cropping and cattle rent the usual term is 3 to 4 years as this gives a certain stability to the farmer. The most common price is in kg of soybean per arable hectare for crop fields and ki of steer for cattle land. These prices are published online which makes it entirely transparent. We mostly negotiate upfront payments per semester. Prices are paid in US dollar to a bank account in Uruguay or abroad.
In forestry, the rental price is also paid in US dollars and the price level depends on productivity (annual growth rate in m3 per hectare) and especially distance to either pulp mill or sawmill.
Other issues may be equally important such as the end date and conservation of soil. We often negotiate a fine as a clause in the rental agreement to get more certainty about the farmer leaving after ending the rental contract and/or harvest of the crops. The mandatory soil management plan is another common clause we add to the rental contract. As well as the inspection of farms without prior notice.
Our services are to negotiate the best possible rental agreement, to supervise the maintenance and compliance with the rental contract, collect the rent and advise about future management options.
