Relationships between Average Cash Rents and Soil Productivity – farmdoc daily

Report on Sustainable Farmland Rent Calculation for 2025

This report outlines an updated, data-driven methodology for calculating average cash rents for farmland, first established in 2017 and now revised for 2025 using data from the National Agricultural Statistics Service (NASS). This framework is crucial for promoting equitable and sustainable agricultural practices, directly supporting several United Nations Sustainable Development Goals (SDGs), including SDG 2 (Zero Hunger), SDG 8 (Decent Work and Economic Growth), and SDG 15 (Life on Land). By providing a transparent formula based on land productivity and location, this model helps ensure economic viability for farmers and encourages responsible stewardship of agricultural resources.

Methodology for Determining Equitable Rent

The calculation relies on a statistical regression model that explains 80% of the variability in 2025 county-level cash rents. The model integrates key variables to create a fair valuation that aligns with the land’s productive capacity and regional economic conditions, fostering a stable environment for food production and rural economies.

H3: Core Variables for Sustainable Valuation

1. Productivity Index (PI): The PI, as detailed in Bulletin 811, quantifies the inherent yield potential of soil. This metric is fundamental to achieving SDG 2 (Zero Hunger) by ensuring that rent is proportional to the land’s capacity for food production. Higher PIs, found predominantly in central and northern Illinois, correlate with higher yields and, consequently, higher average rents.
2. Geographic Location (Agricultural Districts): The model incorporates adjustments based on ten Agricultural Districts (ADs). These adjustments account for regional variations in weather, market access, and infrastructure. This factor supports SDG 8 (Decent Work and Economic Growth) by reflecting local economic realities and ensuring that rental values are contextually appropriate, thereby supporting the financial health of farming enterprises across different regions.

The 2025 Sustainable Rent Calculation Formula

The estimated average cash rent is determined using the following equation:

Estimated Average Cash Rent = -156 + (3.21 x PI) + AD Adjustment

For example, a farm in Champaign County (East AD) with a PI of 134 would have an estimated average rent of $294 per acre, calculated as: -156 + (3.21 x 134) + $20 (East AD adjustment).

Factors Influencing Rent Variation and SDG Alignment

The formula provides a baseline average. Actual rents vary based on specific farm characteristics and landowner-tenant agreements, which present opportunities to advance sustainability objectives.

H3: Land Attributes and Contribution to SDG 15 (Life on Land)

Several physical attributes of a farm influence its operational efficiency and environmental impact, affecting its rental value. Promoting awareness of these factors can incentivize land management practices that protect ecosystems.

• Drainage and Topography: Efficient drainage enhances productivity, while significant topography can complicate management and increase erosion risk. Fair rents should reflect these conditions, potentially encouraging investment in sustainable water management.
• Soil Uniformity: Parcels with consistent soil types are easier to manage sustainably, supporting precision agriculture techniques that minimize inputs and protect soil health.
• Field Characteristics: Large, unobstructed, and regularly shaped fields are more efficient to farm, reducing fuel consumption and operational costs. Rental values reflecting this efficiency can contribute to a more sustainable production system.
• Proximity to Infrastructure: Closeness to grain elevators and suppliers reduces transportation costs and emissions, aligning with goals for responsible production patterns (SDG 12).

H3: Landowner Objectives and Farmer Services

The final rental agreement is shaped by the priorities of both the landowner and the farmer, creating a crucial nexus for advancing sustainability.

• Conservation Practices: Landowners who prioritize long-term soil health and biodiversity by requiring conservation practices may negotiate lower cash rents. This trade-off directly supports SDG 15 (Life on Land) and SDG 12 (Responsible Consumption and Production) by embedding stewardship into the economic agreement.
• Farmer-Provided Services: Farmers who perform maintenance, such as upkeep of waterways and conservation structures, contribute to the land’s long-term viability. These services, which may result in lower cash rent, represent a collaborative approach to sustainable land management.
• Economic Partnership: Landowners concerned with the farmer’s economic sustainability (SDG 8) may agree to more moderate rents, fostering a long-term partnership that is resilient and mutually beneficial.

Guidance for Determining Farm Productivity Index (PI)

Accurate PI data is essential for applying the formula and ensuring a fair agreement. Stakeholders can determine a farm’s average PI through several methods:

1. Existing Farm Records: Many landowners already possess PI information for their property.
2. Soil Type Analysis: Using soil maps and acreage data, the average PI can be calculated by referencing the PIs for specific soil types listed in Bulletin 811.
3. Web Soil Survey: The USDA’s online Web Soil Survey tool can be used to identify a specific parcel and generate a detailed report of its soil types and corresponding PIs.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article’s focus on agricultural land productivity, economic valuation, and land management practices connects it to several Sustainable Development Goals (SDGs). The primary SDGs addressed are:

• SDG 2: Zero Hunger: This goal aims to end hunger, achieve food security, improve nutrition, and promote sustainable agriculture. The article directly relates to this by analyzing the productivity of farmland, which is the foundation of food production.
• SDG 8: Decent Work and Economic Growth: This goal promotes sustained, inclusive, and sustainable economic growth. The article contributes to this by providing a tool for fair economic valuation of agricultural land, which supports the economic viability of farming and contributes to the agricultural sector’s growth.
• SDG 15: Life on Land: This goal focuses on the sustainable use of terrestrial ecosystems. The article touches upon this by considering factors like soil quality, drainage, topography, and the impact of conservation practices on land value, all of which are central to sustainable land management.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the article’s discussion, the following specific SDG targets can be identified:

1. SDG 2: Zero Hunger

   • Target 2.3: “By 2030, double the agricultural productivity and incomes of small-scale food producers…” The article’s core focus is on the “Productivity Index (PI)” of soils, which is a direct measure of agricultural productivity. The formula provided helps in establishing fair cash rents, which directly impacts farmer income.
   • Target 2.4: “By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production… and that progressively improve land and soil quality.” The article implicitly addresses this by highlighting factors that influence land productivity, such as soil types, drainage, and high-risk areas prone to flooding. It also notes that “Landowners who desire conservation practices can expect lower cash rents,” linking sustainable practices to economic outcomes.

2. SDG 8: Decent Work and Economic Growth

   • Target 8.2: “Achieve higher levels of economic productivity through… innovation…” The development and application of a statistical formula (Estimated average cash rent = -156 + (3.21 x PI) + AD adjustment) to rationalize the land rental market is an economic innovation. It helps farmers and landowners make informed decisions, leading to greater efficiency and economic productivity in the agricultural sector.

3. SDG 15: Life on Land

   • Target 15.3: “By 2030, combat desertification, restore degraded land and soil… and strive to achieve a land degradation-neutral world.” The article’s use of the Productivity Index (PI) as a key variable is a direct acknowledgment of soil quality. Factors mentioned that lower cash rents, such as “drainage issues,” “high-risk areas… prone to flooding,” and poor “topography,” are all related to land quality and degradation.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article mentions and implies several indicators that can be used to measure progress:

• Productivity Index (PI): This is the most explicit indicator mentioned. The article states that PI is “used to quantify the yield potential of Illinois soils.” It serves as a direct measure for Target 2.3 (agricultural productivity) and Target 15.3 (soil quality). The article explains how to find the PI for a farm using resources like Bulletin 811 and the Web Soil Survey tool.
• Average Cash Rent ($ per acre): This is a key economic indicator used throughout the article. It can be used to track progress towards Target 2.3 by serving as a proxy for the income-generating potential of farmland. The data is sourced from the National Agricultural Statistics Service (NASS).
• Land Attribute Qualifiers: The article lists several qualitative indicators that affect land value and sustainability, which relate to Target 2.4 and Target 15.3. These include:
  • Quality of drainage
  • Presence of high-risk areas (e.g., flood-prone)
  • Soil type variability
  • Topography
  • Adoption of conservation practices (implied by the statement that landowners desiring them may receive lower rents)

4. Table of SDGs, Targets, and Indicators

Source: farmdocdaily.illinois.edu