There’s a new company out there that aims to be a disruptor in the farm-leasing space.
In the U.S., approximately 40 percent of farmland is leased, not owned. A Chicago-based startup called Tillable refers to itself as a sort of an Airbnb of farmland rental space — and many farmers are NOT happy. Check out the angry #AgTwitter thread here.
— Tillable (@TillableInc) February 24, 2020
Agriculture is a small world, and many landlord-tenant relationships are built on years’ (or even decades’) worth of relationships. The farmer pays the landowner so much per acre to farm the land. Prices are pretty standard and may fluctuate a bit based on market price, inflation, etc. But it’s extremely important to keep land values affordable to keep farmers on the land.
It’s a tough time for farmers who make up less than 2 percent of the population. Grain and livestock commodity prices fluctuate around some of the lowest we’ve seen in decades, while the costs to operate a farm continue to rise. Mental health awareness has also been a huge issue within the agricultural sector as many families struggle to stay afloat, and we could certainly use stronger markets and more farmers, not less.
Tillable’s model is a way to match farmers and landowners to gain access to new land to lease. The problem here, however, is that letters have been sent to landlords telling them their land may be worth more than they’re currently getting. They then make an offer to the landlord to list their land, find them a tenant, and pay them a portion of that multiyear lease up front within 10 days of accepting the offer. If you were a landowner, how would you like to receive a check for $104,000 up front?
An attractive offer, but at what cost?
Rob Sharkey, XM radio show host and star of the new upcoming RFD-TV show “Shark Farmer TV,” interviewed Corbett Kull, CEO of Tillable for one of his popular Shark Farmer podcast episodes.
I HIGHLY recommend a listen. In it, Sharkey shares how his landlord received a letter explaining how he could most likely receive $86 more per acre. The problem? That landlord happens to be Sharkey’s father-in-law. It’s going to be a tough sell when you’re married to your landlord’s daughter.
Sharkey asks the tough questions, wondering where on Earth did they get this data? Who says the land is worth that much? There’s no WAY a farmer could afford to pay that, and he believes Tillable’s numbers and prices for land values are way off. “$305 an acre? Not even the big guys are doing that at this point,” Sharkey says.
Kull stutters about the data being public record and, he says, “I’m not saying it’s accurate …” (9:10 of the interview). He claims they look at property tax databases, farm productivity index, county average rent, and yield to predict fair market value rent.
Farmers aren’t buying it. Rumors swirl that Tillable received somewhat private data from The Climate Corporation that have access to farmer land plots, yield information, and other data. Many farmers feel their privacy and security has been compromised while Tillable attempts to sell their relationships from behind their back.
“And what happens when a farmer comes to you and says, ‘I no longer am able to farm because you took a landlord away from me?” Sharkey asks.
Listen to 20:33 of the podcast to hear the “world’s longest pause” of silence from Tillable’s CEO.
It seems as though that’s what it’s all about. This is, once again, about the almighty dollar. Years of relationships could potentially be destroyed if the larger-scale farmers continue to grow and push smaller-scale farms off their land.
This is just my opinion and initial thoughts though — feel free to try to change my mind. Everyone should form their own opinions. On the flip side, if a farmer is looking to expand and the landlord is looking for a new way to find a tenant, this could help them do just that in the digital era.
Kull feels the current way of finding a landlord tenant farming relationship is outdated and inefficient. In our Midwest farming communities, it is true that everyone sort of knows everyone and word travels fast when land becomes available. Farmers make small talk at the local coffee shop, and those relationships help us all get by. So, could this Chicago CEO be missing the mark? Time will tell.
In the meantime, I wonder about conservation. What if that landowner ends up getting more money from a new farm tenant but he’s not the best steward of the land? Tillable claims they only work with good farmers, but how is that monitored? Through the highest bidder? Not sure. But there should be value in having the best tenant possible. In our area, awards go to farmers who adhere to no-till methods, cover crops, soil testing, crop rotation, etc. For some of us, even the very word “till” makes us cringe, so let’s hope that’s worth something. Should we be financially rewarding the farmers who do the best job? Most likely, yes. In most any other career, you receive promotions and get a raise when you do a good job. As it stands, it appears the financial aspects of Tillable may not take this into consideration, which can cause even more of a stir.
Data and personal information taken without notifying the farmer, sending letters to landlords without warning, questionable acquisition of said data, little regard for farmers livelihood while looking out for more dollars and their company, potentially disrupting relationships … I am not sure I see this working out for them, but I hope to be proven wrong.
In my opinion, they’re fighting an uphill battle on an industry built on integrity, family, blood, sweat, and tears. They may just have a long ways to go before earning the trust of the farming community. We shall see how it all unfolds.
Michelle Miller, the Farm Babe, is an Iowa-based farmer, public speaker, and writer, who lives and works with her boyfriend on their farm, which consists of row crops, beef cattle, and sheep. She believes education is key in bridging the gap between farmers and consumers.