Although the USDA offers beginning farmer loan programs
that provide preferential treatment and favorable terms for
things like down payment assistance, an applicant with substan-
tial student loan debt may be turned away. Most loan programs
use debt-to-income ratios to determine whether you will be able
to afford additional debt. With some beginning farmers facing
student loan payments as high as $1,000 per month, there isn’t
much room leftover to add a monthly mortgage payment.
Over the last several years, NYFC has advocated for legisla-
tion that would include full-time farming in the Public Service
Loan Forgiveness Program. The program provides govern-
ment workers, nonprofit employees, and other types of public-
oriented workers with loan forgiveness if they stay employed in
that capacity for 10 years. Although the legislation gained some
support on Capitol Hill, NYFC has been unable to get it passed.
For those saddled with student debt, this leaves little recourse.
Paying down debt is the only way that most beginning farm-
ers will be able to afford land or receive financing to start their
operations. Understanding the USDA beginning farmer loan
programs and their criteria can help debt-ridden beginning
farmers develop a strategy for positioning themselves to receive
financing. Setting up a meeting with local Farm Credit and FSA
representatives is also a good way to start figuring out what steps
you need to take to qualify for any available programs.
“Speaking to a lender before there is an actual need to borrow
money is a savvy way for beginning farmers to put all their cards
on the table,” Matteson says. “That allows the lender to think
things through and recommend the most effective pathway,
which often means combining FSA and Farm Credit programs
to come up with a creative solution.”
- How to Run a Profitable Business
E
ven if a beginning farmer finds a land opportunity, it
can be a struggle to run a profitable farm business. The
excitement and thrill of launching your own farm operation
can distract from the necessity of keeping thorough balance
sheets and making sure the operation can support itself.
Even if beginning farmers are aware of the need to create a
business plan, they may not have the training or background
to put one together unassisted. Producers located near urban
Issues important to young farmersThe National Young Farmer Coalition (NYFC) is a grassroots network
of 140,000 young farmers, ranchers, and consumers fighting for the
future of agriculture. NYFC has 40 chapters in 28 states.
The organization conducted a 2018 Candidate Survey to provide voters
with information on where the candidates for U.S. Senate and the U.S.
House of Representatives stand on a number of issues important to young
farmers as indicated in NYFC’s 2017 National Young Farmer Survey.
The survey was conducted in select districts and states nationwide. The
focus included districts with members of the House and Senate ag com-
mittees and districts where NYFC has local chapters. Below is one sample
question and responses from two candidates.
Question: With farmers over 65 outnumbering farmers under 35 by a
margin of six to one, the nation’s farmland is rapidly transitioning ownership.
It’s estimated that 10% of America’s farmland is likely to change hands in
the next five years. How do you think Congress should address this trend?
Response #1: “The USDA altered its policies in 2017 to help ease the
number of land to next-generation farmers, and I believe we should embrace
policies like these,” says Mallory Hagan, who was running for U.S. House
of Representatives (AL-3). “Farmland accessibility is a top barrier for new
farmers. Improving and streamlining the federal application and paperwork
process for many of the federal programs through the USDA to make the
interaction between new, young farmers and the federal government easier
and faster could improve young farmer success rates. With a majority of land
shifting hands within the next 25 years, America should help that land shift
to a diverse group of farmers who will use new technologies and methods to
keep land producing high yields for years to come.”
Response #2: “Congress should require farmers over a certain age to
have an estate plan in place that includes their farm so there is easier
transferring of lands,” says Jeannine Lee Lake, who was running for U.S.
House of Representatives (IN-6).Photography: krisanapong detraphiphat,
Bonus Successful Farming at Agriculture.com |August 2019 gettyimages.com
centers or in areas with a strong food-oriented culture should
take advantage of farmers markets, local food-focused res-
taurants, food hubs, and other direct marketing channels.
The NYFC 2017 survey indicated that many new farmers
wish there were business planning workshops and support
tools available to help them make sure their new venture will
pencil out. This can include everything from finding the right
market to understanding which enterprises bring home the
most income. A small farmer himself, Matteson says, “Let’s face
it, beginning farmers don’t go start a farm operation in order to
learn how to be an accountant. What they need to know is how
to interpret good financial records, and that it is OK to get help
to set up and maintain a good record keeping system.”
The USDA’s Make a Farm Business Plan features a
multistep guide to creating a plan, while the agency’s National
Agricultural Library maintains a list of other online outlets for
business planning including Extension publications. Some
business schools also offer free business support services hosted
by students as part of community outreach programs.b u s i n e s s Continued