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Nudging landowners to incorporate values into leasing agreements

Raymond E. Massey, Mykel Taylor, and Michelle Segovia

Summary

Land leasing educational programs have been long-term efforts at the University of Missouri and Kansas State University. Our educational efforts focused on typical farm management/economic concepts as determining rental rates and documenting lease provisions.
During our sessions, we often heard landowners indicate that they would like to incorporate some social values in their leases – similar to socially conscious investing. But they did not know how. Furthermore, landowners expressed interest in promoting conservation and environmental quality and helping young farmers while not increasing their financial risk.
In 2019, we conducted a focus group with nine landowners to discuss their willingness to integrate values in rental rate decisions. We used principles from behavioral economics to explore landowner’s interest in adjusting the timing of lease payments, cost sharing on practices designed to promote conservation and the environment, and their willingness to help younger farmers by using variable rate leases. The results from the focus groups suggested interesting opportunities existed to incorporate social values into leasing agreements.
We leveraged our experience with land leasing educational programs and our focus group discussions to receive USDA funding to develop extension materials that incorporate landowner social values and environmental practices. We are in the beginning stages of this work and would like to present some of our experiences with other farm management educators.
Our objective is two-fold. First, make educators aware of extension programs that are already incorporating behavioral economics principles. Second, seek input from those educators on how to further this effort in land leasing.

Details

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