Land Farming - Leases and Access

Farmer Freddy is informed about his options regarding land farming


“I’ve got great news!” Freddy repeated to his skeptical daughter on the telephone, “I’ve been approached with an offer to improve the farm and it won’t cost me anything. In fact they’re going to pay me!”

“Wow that is great! So what’s specifically going on?” asks Pebbles.

“Do you know those low lands that we can’t pasture because they’re always too soft and wet?”

“Of course, you’re always complaining about wasted lands that you can’t do anything with.” Pebbles replies cautiously. “You’ve been wishing for years that you could make use of them.”

“That’s right; it’s marginal land at best. Not only can’t I use them for pasture; I can’t even put bee hives out there. But last week, a company contacted me about their Land Farming operation. All I have to do is sign a lease and let them spread the cuttings from their drill sites. They told me that when they’re done, the land will be returned to me and improved, probably even for pasture!”

“OK Dad, let’s take this slower,” Pebbles warns.

“That’s why I rang you Pebbles; you always take a clear view of these things. What should I be concerned about, beside the rental rate and the term?”

“Well Dad, the claims people make aren’t always completely true, and Land Farming has been copping some bad press lately. I’m no scientist, so I can’t say you should be concerned or not, but legally, you need to make sure that your rights are protected in any lease. You also need to make sure that any environmental issues are covered.”

“Isn’t that something for the Council to worry about, Pebbles? After all, it’s the Council that will approve the Resource Consents for the company.”

“Maybe, but ultimately this is an activity on your farm; you need to protect your interests. As you know, Land Farming is the practice by which certain drill cuttings and solids, drilling fluids, drilling mud and other industrial processes during exploration activities are spread onto lands. Before the materials are disposed of they are gathered, treated and tested; often this provides an effective disposal of the materials for the oil company. While the practice is intended to improve pasture conditions, there is some controversy around long term impacts.”

“Right, and I’ve heard that in some instances milk produced from the land has been refused. What could I do if that happened to us?”

“That’s all I’m saying Dad,” Pebbles replies. “First you should review any other contracts that you might have that relate to environmental conditions and see if there are restrictions on your farming practices. Another thing is to make sure that you can terminate the lease in certain circumstances, such as the company disregarding provisions of the Resource Consent or adverse economic impacts to the farm. It will also be important to have the remediation of lands to occur at the end of the lease, regardless of how the lease is terminated.”

“That might be a big ask. What if I can’t terminate the lease or if I have trouble selling the milk from the land farmed pastures?” Freddy wonders aloud.

“I guess you’ll have a decision to make,” Pebbles offers. “Look, Land Farming is an established practice that has been done in other parts of the world, and is being understood better all the time. Maybe you can take a wait-and-see approach. The question could hinge on if you think that the potential revenue from the lease and the improvement from the land will outweigh the potential farming revenue you could otherwise gain from farming that area.” 

“But this is exciting news, Dad; you have the opportunity to improve non-productive lands on the farm. Why don’t I look at the lease when I come ‘round this weekend?”

“Sounds good, Pebbles.”

The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document. 

If you would like more information on any of the topics in this document, please contact your usual Auld Brewer Mazengarb & McEwen adviser. 

 

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