Does wind "farming" keep farmers in business?

Last week, Windaction.org looked at some of the adverse effects of wind energy development on traditional farming in the State of Illinois. In this second essay we explore the relationship between wind developers and farmers and test the concept that wind "farming" is helping farmers stay in business.

It's important to know that Illinois' landowners and the farmers who work the land are not always the same. Illinois is second only to Connecticut for the highest number of absentee landowners (58.6%) representing 64.48% of the acres. While farmers own some land, most need to cash rent or share crop additional land to make their operations viable.

Absentee landownership in Illinois, in large part, is the reason for the prevalence of wind energy development in the state. Most properties leased for wind development are owned by out-of-area landowners who have become disconnected from the land.

A farmer in Illinois explained it to us this way: Imagine you are the child or grandchild of a deceased farmer. After college, you moved to the city to enjoy a prosperous career but still owned a large tract of family farm ground located hundreds, or perhaps thousands of miles from where you now live. Chances are you continued the relationship your father had with his share-cropping tenant or family of tenants but with years having passed and the tenant farmer retired, your attorney or farm manager now advises that you change to a high cash rental agreement.

What's the difference?

Share-crop tenant farmers seek out and enjoy longer term relationships with their landowners. In these arrangements, landowners share in the operating decisions of the farm and hold a vested interest in the long-term productivity of the land since their income is derived from a share of the farm's gross earnings. Any activity that would hinder the long-term productivity and environmental sustainability of the land could cause a decline in the resource's asset value.

Cash renters, on the other hand, offer fixed payments to the landowner for use of the land, buildings and other facilities. These arrangements are less risk for the landowner, the bookkeeping is much easier, and the only expenses incurred are limited to property tax and liability insurance. Occasionally the owner may need to improve the soil by adding lime but only if specified in the rental agreement. A good landlord would pay to keep the drainage system functioning but not always.

It's not unusual for cash renters to come from outside the area and to have limited experience with the soil types. They may be farming thousands of acres and barely know the condition of their crops until they return in late summer and fall for the harvest. Farmers tell Windaction.org that there's a striking visual difference between farms managed by local tenant farmers and those worked by cash renters.

Tenant farmers have no rights when a wind lease is negotiated. If they complain about having to farm around the turbines, damaged drainage tiles or low crop yields due to soil compaction they risk losing their farms altogether. Competition for rentable farmland is fierce, and absentee landowners may view their tenant farmers as more trouble than they're worth, so tenants learn to be silent.

While absentee landowners may view cash rents and wind leases as equal revenue opportunities, farming communities built around the productivity of the land are feeling the adverse effect of this shortsighted approach to farmland management. Farmers Supporting Independent Agriculture (FSIA) argues that productive farmland is a key natural resource in the State and any policy decisions that threaten its productivity also jeopardize Illinois' agriculture communities.

The idea that "wind farming" is helping farmers to keep and maintain their farms is not representative of what's happening in Illinois. Yes, some operators may have overextended their borrowing at local banks which helps explain why lenders are supportive of the wind projects. However, those who have leveraged their operations conservatively tell Windaction.org that they're not interested in the "wind fall". One Illinois farmer wrote us: "The lease payments are not sufficient compensation for the rights we are asked to forfeit."

Windaction.org wishes to thank the Illinois farmers and other agriculture professionals who took the time to contribute to this piece.

SEP 2 2010
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