Loans, grants help a new generation of farmers take the field

SPOKANE VALLEY — As many as a third of farmers in the United States are over the age of 65, according to a study by the University of Minnesota’s Center for Farm Financial Management. Many of these have family members to pass their farms on to, but in order for American agriculture to continue, a new generation of farmers is needed.  

The U.S. Department of Agriculture has assistance available for beginning farmers or those who are returning to the field after an absence, according to an announcement from the USDA. The USDA’s Farm Service Agency offers farm ownership and farm operating loans to farmers and ranchers who have trouble obtaining commercial credit from a bank, according to the announcement. 

“Farming and ranching is a capital-intensive business and FSA is committed to helping producers start and maintain their agricultural operations,” Geremy Nelson, FSA Acting State Executive Director in Washington, wrote in the announcement. “FSA loans are designed to make sure that everyone has access to credit. Last year, FSA in Washington obligated $32.9 million in loans to beginning farmers and ranchers.” 

Those loans come in two forms: ownership loans and operating loans. Ownership loans may be used to buy or enlarge a farm, build or improve buildings, improve soil and water conservation and pay closing costs. Operating loans may go to purchase livestock, poultry, farm equipment, fertilizer, and other material; for family living expenses; refinancing debts; paying hired farm laborers; installing or improving water systems for home, livestock or irrigation use; and other similar improvements. 

The loans also come through two methods. Direct loans come straight from the USDA and can be for as much as $600,000 for an ownership loan or $400,000 for an operating loan, according to data from the USDA. Guaranteed loans are made through a participating private lender and max out at $2,251,000 for either ownership or operations. 

To qualify as a beginning farmer, an individual must have operated a farm for less than 10 years and must not own a farm greater than 30% of the average farm size in the county. The applicant must participate substantially in the operation, according to the announcement. If the applicant is an entity, all members must meet these requirements as well as being related by blood or marriage. At least one member of the entity must have three years or more experience in the business operations of a farm. 

The FSA also has a special program to assist with down payments in purchasing a farm, according to a fact sheet from the USDA. This program can also be used by retiuring farmers to transfer their land to the next generation. The borrower must be able to come with a down payment of at least 5% of the purchase price and the rest can be obtained from a private commercial lender and guaranteed by the FSA. 

In addition to the loans, the USDA’s Beginning Farmer and Rancher Development Program offers grants for education, training and mentoring for beginning farmers and ranchers, according to the CFFM.  

The BFRDP is administered through the National Institute of Food and Agriculture and can fund services relating to: 

• Basic livestock, forest management, and crop farming practices. 

• Innovative farm, ranch, and private, nonindustrial forest land transfer and succession strategies. 

• Entrepreneurship and business training. 

• Technical assistance to help beginning farmers or ranchers acquire land from retiring farmers and ranchers. 

• Financial and risk management training, including the acquisition and management of agricultural credit. 

• Natural resource management and planning. 

• Diversification and marketing strategies. 

• Agricultural rehabilitation and vocational training for veteran farmers and ranchers. 

• Farm safety and awareness. 

• Food safety and recordkeeping 

“For over a decade, this highly successful initiative has provided competitively awarded grants to community organizations, state extension services, academic institutions, and producer groups to support and train new farmers and ranchers across the country,” the NIFA wrote on its website. 

More information is available from the Farm Service Administration at bit.ly/FSAbeginningloans, the Center for Farm Financial Management at www.farmanswers.org,and the National Institute for Food and Agriculture at bit.ly/BFRDP.