Investors in stocks receive income through dividends. Investors in farmland receive income by renting land to a farmer. This can be accomplished under two basic arrangements:
Under a cash rent arrangement, a tenant (farmer) pays a fixed amount of rent to landlord (land owner) to use the underlying farmland. Typically, rents are either paid in advance or guaranteed by a letter of credit.
Under a share crop arrangement, a landlord (land owner) does not receive a fixed amount of rent from a tenant (farmer) but rather receives a portion of the crop produced on the land. The farmer bears all input costs, while the land owner receives a portion of the crop (typically 1/3).
Unlike other real estate, farmland is always 100% rented. The reason for this is that farmers aggressively seek additional ground to rent. Most farmers need additional land in order to spread the cost of their equipment over additional acres.