Homesteading, Organic Gardening, How to Farm, Preparedness, Self-Reliance
At least five sources of potential funding are available including the local bank, Farm Credit Services, U.S. Department of Agriculture (USDA) Farm Service Agency (FSA), Aggie Bond programs, and private contracts.
Local banks. Many banks participate with agencies in providing financing to beginning farmers including aggie bond programs and guarantee financing through USDA. Although it is uncommon, some banks have created local beginning farmer financing initiatives that link funds from depositors to a special lending pool available to beginning farmers. Inquire with your local bank if such a program is available.
Aggie Bond Programs. Several states have created a tax-free bond program to assist beginners acquire farmland, buildings, equipment, etc. Some require management courses or business plans (a good idea for any investment). In Nebraska look at www.nifa.org or call 800.204.6432; for other states look here: http://www.stateagfinance.org/directory.html.
USDA Beginning Farmer Loan Programs. USDA Farm Service Agency (FSA) is the traditional lender of last resort and has its roots in providing funds to beginning farmers. They provide loans with funding Congress appropriates each year with a portion targeted toward beginning farmers.
For more information on FSA loan programs for beginning farmers, contact your county USDA FSA office or get an overview from the Center for Rural Affairs website: http://www.cfra.org/resources/Publications/Beg_Farmer_loan_programs.htm.
Farm Credit Services “Young & Beginning” Program. Farm Credit Services of America offers a Young & Beginning loan for less-established producers (http://www.fcsamerica.com/products/YoungBeginningProgram.aspx). This program is designed for producers age 35 or younger, or with 10 years experience or less. Farm Credit Services offers real estate loans, operating loans, and insurance. In addition, it offers Business Education Reimbursements for business classes and financial management tools; Youth in Agriculture Loans of up to $2,500 for students; and College Scholarships.
Other Beginning Farmer Finance Programs. Various states provide beginning farmer finance programs. They range from direct loans for special types of projects to guarantee financing. A list of states and the types of programs they offer can be found at http://www.stateagfinance.org/ . Contact your state department of agriculture for details in your state.
Beginning Farmer Tax Credit. Available in Iowa and Nebraska, the tax program provides an incentive to current and retired farmers who rent agricultural assets to a beginning farmer. The owner receives a tax credit for several years based on the value of the lease. Learn more about Iowa’s program at 515.281.6444, http://www.iada.state.ia.us/BFTC/index.html or Nebraska’s program at 800.446.4071, http://www.agr.state.ne.us/division/beg/beg.html.
Private Contracts. Many property owners are willing to contract directly with a beginning farmer for sale of land, machinery, livestock, or other assets. These contracts can range from cash deals to share rent to work-in arrangements in which labor pays for part or all of the property. Examples are on the Center for Rural Affairs’ website, successful linking strategies.
General Production and Marketing Information: ATTRA is a free information source for sustainable farmers. ATTRA specialists will research and send you publications about your interest area. A number of topics are available online: http://www.attra.org, or by calling 800.346.9140.
Courtesy Center for Rural Affairs
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