this lack of control as a disadvantage; however, the contract between the member and the cooperative may alleviate some of the cooperative's concern by specifying the quality of crop that will be accepted by the cooperative under the agreement. Successful performance of marketing contracts is the "life-blood" of a cooperative. cooperatives, courts are more willing to order specific performance in the event of breach by a member, even when there are ascertainable money damages or the contract contains a liquidated damages clause. undoubtedly affects all members, including the members' ability to carry on business, and the general credibility of the cooperative. The availability of specific performance is an advantage for a biomass supply contractor to a cellulosic ethanol plant because there is less concern that the steady stream of biomass feedstock will be hindered by a member's breach of his or her marketing contract. Cooperatives may prove to be extremely valuable in biomass production because of the close relationship between the cooperative and its members, which in turn fosters a reliable source for a large quantity of biomass feedstock. and a conveyance of an interest in real property. exclusive possession and control of the land for the term of the lease. the crop share and the cash rent lease. Under a crop share lease, the landlord receives a specified share of crop proceeds in return for providing the land and a share of input expenses. the remaining input costs. return if production or market value of the crop increases; however, the landlord also shares with the tenant the risk of crop failure and declining market prices. Provisions commonly found in crop share leases include: method of crop splits, responsibility for payment of input expenses, and responsibility for storage of the crop. the landlord will typically perfect a security interest in the crop. lease, to grant to the landlord a security interest in the crop, and the landlord will perfect its interest by filing a financing statement. Under a cash rent lease, the landlord receives payment for use of the land. The landlord typically pays real estate taxes and for major repairs on the premises, but pays no portion of input costs. The tenant pays for all input costs, retains the entire harvested crop, and provides the labor and management. In this arrangement, the landlord has a fixed return and assumes no risk as to crop yield or market price fluctuation. The landlord does, however, carry the risk of non-payment as well as the risk that the tenant will use farming practices or grow a crop that damages the leased land. Cash rent leases, like crop share leases, usually require that the tenant grant the landlord a security interest in all crops to ensure payment of rent. Clauses commonly found in both crop share and cash rent leases include: rights of entry after termination of the lease, land use obligations, upkeep of the leased property, type of crop permitted, actions of the tenant that require consent of the landlord and general maintenance duties. be year-to-year leases that automatically renew unless one party terminates the agreement as specified in the lease documents. However, with respect to biomass, the contractor supplying likely want, or be required by the project owner, banker, or investor, to enter into relatively long-term leases. The character of biomass feedstock will often require leases for ten years or more in order to realize the full benefits of the crop. With this in mind, if the landowner is already leasing his or her farmland, the decision to grow biomass instead may be chiefly a financial one, based on the return offered by the contractor compared to available alternatives. The discussion of appropriate terms to include when contracting for biomass is one that must be continued among farmers, feedstock suppliers, bankers and biomass conversion facility owners as the industry progresses, to eventually find a middle ground on which all parties can agree. In fact, in 2004, the "Tennessee Processing Coopera- tive Law" was enacted, which specifies that five-year auto-renew terms are permitted. Tenn. Code Ann. § 43-38-114. transferred to the cooperative upon delivery unless the contract expressly provides for transfer at another time." Tenn. Code Ann. § 43-38-114. 6 Donald B. Peterson & Keith G. Meyer, Agricultural 8 The share of proceeds will likely depend on local Shares generally range from a quarter to a half of all crop proceeds. 11 Id. at 103. 12 A security interest will only be appropriate if the tenant to the landlord of its share. 14 Certain crops are more invasive than others (e.g., specific as to liability for damage to farmland and ob- ligations of the tenant to return farmland to its original condition upon termination of the contract. |