A smallholding is a property with more land than a garden, but less than a farm. The land is mostly used for productive mixed crops and livestock rearing. The difference between smallholding and a farm are blurred but basically a smallholding is just a very small mixed farm – small being relative to the size of farms in that particular society.
Negotiating small holding rates rental rates can be challenging. Generally, landowners and tenants want to be fair with each other and don’t want to be taken advantage of. Landowners need to cover the costs associated with owning land. Tenants need land in order to grow a crop and generate income. Most landowners and farmers alike want an easy way to determine fair rent prices. However, if market prices become volatile it can complicate the situation. When prices and yields are good, farmers can afford to pay more for rent but, when commodity price recede, like they have recently, their ability to make higher rent commitments are eroded.
There are a number of factors that affect the value of land for rent purposes including productive capacity of the field, accessibility and local farmer competition for land. Below is a list of some items to consider when evaluating the amount that should or could be charged for cash rent: