When farmers first hear about Tillable, the reaction is often the same. It’s just another auction site where the highest bid always wins, price is the only thing that matters. That is not the way Tillable works. Tillable is not an auction site and our process is designed to be fair to farmers using proven economic principles. We also ensure that a farmer’s entire operation, how they farm, and their experience are considered by landowners, not just the price/acre.
That doesn’t mean that price isn’t important. We want to be clear that one of our primary goals is to make sure that a landowner is being paid fairly for their farmland.
Our process is called Price Discovery and relies on the following components to ensure a fair market rent:
- No target price
- Blind offers
- Equal access to information
- A level playing field
1. Our Process
No target price.
What that means is we won’t tell you what the previous year’s rent was on a farm. This forces each farmer to do their homework. We want you to determine what this farm is worth to your operation based on the information that you have available without any guidance or coaching.
You can’t see what another farmer offers and they can’t see what you offer. You must do your own homework. This also prevents the price from being artificially inflated, or “bid-up.”
Equal access to information.
Every farmer has equal access to information. If the landowner answers a question, the answer to that question is posted in the Q&A section of the listing for all interested farmers to see. If there is lots of information on a farm every farmer has that information, if there is limited information on a farm, every farmer has limited information.
A level playing field.
Our goal is to ensure a fair market rent and protect the long-term value of the asset. Auction platforms bid up the price per acre making it difficult for a farmer to follow appropriate soil management protocols and still make money. If you make an offer on Tillable you are required to report your yields, and fertilizer and nutrient applications. This ensures that all offers account for the cost of soil management. Additionally, if a landowner has specific requirements, like no till and use of filter strips, all offers must take those requirements into consideration.
The market for renting farmland is very inefficient. The market often lags real economic conditions and prices are slow to go up, but once up, rarely come down. We believe that our marketplace will help address these inefficiencies by taking a real market approach to renting farmland. We believe in farmers over formulas, it is you, the farmers, that determine the fair market price for a farm on Tillable.
2. How we make money.
In the first year, we collect 30% of the increase in rent from the landowner and 2% from the farmer. That doesn’t mean that we believe rents should go up on all farms. What it means is that when we help a landowner determine that their farm is underpriced, we get paid. Which we think is fair. We think that we have built a process to price those farms fairly, meaning that when the rent increases on a farm it is because it was previously undervalued, not because the price was artificially inflated by our platform. Every year thereafter we collect 2% from both farmers and landowners.
3. Does “Price Discovery” happen every year?
No, not necessarily. The landowner can choose to not publicly list a farm, opting to keep you as a farmer. You and the landowner can negotiate directly using information from Tillable to help you both understand current market trends.
Our goal is to develop long-term relationships between farmers and landowners where the relationship is built on a fair price and documented stewardship of the land. Our platform documents all farm activities using technology providing reassurance to a landowner that their farm is being taken care of. Even if their farm does not go through the price discovery process, Tillable will provide both landowner and farmer with information to reach a fair market price year after year.
The land farmers rent is likely one of the most valuable assets that a landowner possesses. Tillable helps them ensure that the asset is protected and that your efforts to protect it are recognized and documented.
4. My landowner decided to use Tillable, will I lose the farm?
Maybe, but the odds are in your favor. Most landowners keep their farmer. Many join the platform because they believe in the long-term value that Tillable adds to their land through record keeping and ensuring a fair market rent, they don’t necessarily join because they don’t like their farmer.
If your landowner has listed on Tillable, you will need to make an offer through Tillable. If the landowner chooses to continue their relationship with you, you will sign a new lease through Tillable and Tillable will collect payments, and collect data for the landowner.
5. Are the farms on Tillable real?
Yes. Every farm listed is real and if the description says it is accepting offers, than it is accepting offers. However, if you read the section above then you know that at least some portion of those farms already have a preferred farmer, somebody that because of their relationship has an advantage on that farm. However, there are always farms that have no farmer. We can’t tell you which is which, but you have an opportunity to win every farm that is listed and put yourself in front of a landowner that is interested in understanding the true demand for their land.