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Agricultural Leasing -- Principles and Background

Summary

Agricultural production requires the services of many capital items. A capital item is one whose useful life stretches beyond a single production period, where a production period typically is considered to be one year. Prime examples of capital items are farm land, buildings, breeding livestock, and machinery. There are three principal ways that the services of capital assets can be acquired: 1) through ownership, 2) by renting (leasing), and 3) by hiring (custom work). This publication is focused on the second method, renting or leasing.