Affording the Farm: Financing for Beginners
For beginning farmers, finding the support to start your own farm or to improve your existing farm can seem like a challenge. This challenge doesn’t necessarily let up for the first few years—for perspective, a beginning farmer is defined as someone who has farmed for 10 years or less on their current operation. In other industries, you might feel as if you’ve passed the beginning stage by year 8 at least, but if you’ve ever worked with soil, plants, and livestock, you know the intricacies of these living systems are ones that are learned over a lifetime.
According to the USDA Ag Census, in 2012 there were 522,058 beginning farmers in the US, and 226,670 of those had been farming for five years or less. Though this may sound like a healthy number of new folks entering the field, the census also showed a 20% decrease in the overall number of beginning farmers compared with 2007 (with a 22% decrease in the five year or less category).
There are surely many factors leading to this decrease in beginning farmers across the country, though two of the largest hurdles when it comes to starting a farm are access to capital and land. Many new people entering agriculture are first generation farmers, and therefore don’t have family land or equipment to start out with.
As our food system faces unprecedented droughts in the west, higher flooding rates in the east, and all-around unpredictable weather from year to year, plus an aging farming population where the average age of the principal operator is 58, it’s imperative that we find ways to support beginning farmers, as they are the ones who will not only feed us, but who will be creating new sustainable systems in a changing climate, which in turn will inevitably reshape our national food system.
With that in mind, I wanted to learn more about what kind of financial support there is for beginning farmers. I myself am a beginning farmer, going into the third year of running my business, and am looking at how to finance some major infrastructure improvements. As I began to search for financing options, I found some good news: the number of programs, lenders, and borrowing options out there are many! The closer you look, the more people and places you’ll find that are committed to supporting new farmers and the local food economy. The hard part of it is wading through all the opportunities to find the right one for you.
Financing options can be broken down into a few categories: private contracts, community and state, and federal lending programs. There are also grants to be found in each of these categories.
Private contracts are those between farmers and current land owners, and often come into being when a current land owner is looking for a new farmer to take over his/her business, or for a new farmer to revive an agricultural business on land that is no longer in use. Finding a situation like this take more relationship building and willingness to seek out land owners to present them with a proposal. Many of these organizations, like the "Land Links" help connect farmers seeking land with land owners.
Center for Rural Affairs - National Land Link and Financing
Beginning Farmers - Finding Land to Farm - Land Link programs by state
Information on Community and State financing programs can often be found through your state’s Cooperative Extension office. In Vermont, UVM Extension runs the New Farmer Project, as well as the Women’s Agricultural Network and the Farm Viability Program, all three of which have educational and technical support for beginning farmers. Local and state credit unions are another, more traditional lending option.
The National Council of State Agricultural Finance Programs has an excellent Directory of State Programs, which is a good place to find more information on loan programs state by state.
Federal programs through the FSA present still more options for financing, and they offer a a straightforward guide to farm loan programs that details all of the different programs available and helps you figure out exactly where to start.
When you’re ready to start reading through the different types of loans, I recommend getting a hot cup of tea or coffee and a chocolate chip cookie and settling in for a morning or afternoon of gathering information and noting down questions. While there is a wealth of information online, I find it most helpful to get a sense of the programs, write down my questions, and follow up with a real person who can have a more in-depth conversation with me. Reaching out to someone in the Beginning Farmers office at Cooperative Extension can be a good place to start. Don’t forget to have some fun, too! Though it can be a bit daunting to wade through so much information, remember that these all present opportunities, and behind each link there is a real person who wants to see new farms succeed.
Katie Spring owns and operates Good Heart Farmstead in Worcester, VT with her husband Edge and son Waylon. They grow diversified vegetables and meat that they market through a CSA and their mission is "to make fresh, local food accessible to everyone, despite income." They work with NOFA-VT's Farm Share program to provide subsidized CSA shares to low-income customers. Katie writes on a variety of topics for her own blog, Wild Spring, and works in Sales at High Mowing during Vermont's cold winter months.