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Client Corner: Who has rights to corn stover?

November 8th, 2011

Contributed by William Edwards, extension economist and Melissa O’Rourke, extension field specialist

Client Corner: On a farm with a cash rent lease, if the corn stover is harvested and sold, who gets the payment, the tenant or landowner? Could those rights be sold to someone else?

From a legal standpoint, Iowa Code 562.5A provides:  “Unless otherwise agreed to in writing by a lessor and farm tenant, a farm tenant may take any part of the aboveground part of a plant associated with a crop, at the time of harvest or after the harvest, until the farm tenancy terminates as provided in this chapter.”

This code section tells us that in the absence of a written agreement to the contrary:  (1) The tenant has the right to take the aboveground plant residue at any time during the tenancy (until March 1st).  (2) The tenant also has the right to leave all that residue, if that’s what he wants to do.  (3) Nobody else has the right to that plant residue unless the tenant agrees to it, in writing.  (4) The landowner does not have the right to sell the plant residue to anybody else.  (5) If a processor – such as a biodiesel or cellulosic ethanol plant — wishes to contract with someone to harvest and remove the plant residue, the contract and any associated payment must be with the tenant. 

An additional question raised in relation to this issue is whether the tenant has the right to subcontract with another party, such as a biodiesel processing plant, to allow someone other than the tenant to enter upon the property of the landlord to remove the stover?  Again, in the absence of written lease provisions to the contrary, Iowa Code 562.5A does not limit the tenant’s right to subcontract.  In practice, many tenant farm operators already subcontract with others to perform a variety of operational functions, from planting, application of fertilizer or chemicals, or combining of corn or beans.  Similarly, the tenant may arrange for another party to remove plant residue. 

From an economic standpoint, the tenant has paid all the expenses of producing the crop and the stover is part of the crop, so the tenant should get the payment. The tenant would also be responsible for replacing the fertilizer nutrients removed in the stover for next year’s crop.  The potential income from the sale of the stover would be reflected in the cash rental rate.  The tenant and the landowner should agree on how much stover can be removed without significantly increasing the potential for soil and wind erosion.

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