Farm Bill Increases Support for Beginning, Veteran, Urban, and Minority Farmers
As the average age of American farmers creeps towards 60, policymakers are paying more attention to the need to woo the next generation back to the land and trying to lessen some of the formidable challenges new farmers and ranchers face today.
The Agricultural Act of 2014, or Farm Bill, contains multiple provisions to support beginning, veteran, urban, and socially disadvantaged or minority farmers that people should know about and take advantage of.
Here are some highlights.
Increasing Access to Farmland & Financial Support
Access to affordable land and credit are two of the biggest obstacles new farmers face: the price of farmland has skyrocketed in recent years in many parts of the country, and banks are reluctant to lend to farmers who don’t have a substantial track record or who are not adopting conventional commodity production patterns. The new Farm Bill addresses these challenges through several programs.
The Conservation Reserve Program (CRP) Transition Incentives Program encourages retiring farmers to rent or sell their land to beginning, socially disadvantaged farmers, and returning veterans who are starting to farm. The program provides landowners with an additional two years of CRP rental payments on the land as long as the beginning farmer continues conservation practices. The new producers can also transition the land to organic production. The Ag Act of 2014 provides $33 million to support this program over the next five years, up from $25 million in the last Farm Bill.
The Farm Bill includes some good changes to farm loan programs that will make them more helpful for beginning farmers and ranchers. USDA’s Farm Service Agency (FSA) was established to provide government financing to producers who could not get it through conventional lenders. The Agency provides loans to help new farmers buy farmland and equipment along with support for other operating costs.
The new Farm Bill endorses and continues the Department’s very successful microloan program for loans of less than $35,000. The bill maintains a priority for lending to beginning farmers and ranchers and gives FSA increased flexibility when deciding what kind of experience can qualify a potential borrower. In the past, FSA agents had to follow strict guidelines in assessing potential borrowers’ eligibility. The Farm Bill recognizes that the farming sector is changing and provides FSA agents the ability to factor in a broader range of farm business experience when deciding if a borrower is credit-worthy.
The bill lowers interest rates on some loans and provides more flexibility for FSA to lend to farms of varying sizes and to make loans on a larger percentage of a farm’s land.
Young people starting to farm in urban areas can now take advantage of FSA’s youth loans – a recognition that the next generation of American farmers may come from and farm in cities.
New Farmer and Rancher Training
Many excellent organizations around the country provide valuable training to new farmers with financial support from USDA’s Beginning Farmer and Rancher Development Program (BFRDP). The Farm Bill provides at least another five years of funding for this work. Interested new or potential farmers should check out the website for information about groups in their area offering training programs.
Good financial management is key to success although perhaps not as fun other parts of an agricultural business. Look at the Start2Farm site for basic resources you will need for your business – paying attention to farm finances will become much more gratifying as your business moves further into the black.
Conservation & Crop Insurance
Farm Bills are the one piece of legislation that make conservation policy for the enormous amount of land in private hands, or not owned by the government. The Farm Bill was first created in response to the environmental disaster that was the Dust Bowl, and it expanded exponentially in the mid-1980s. This most recent version of the bill rearranges the structure of some key conservation programs it covers. More will be spent on conservation than on commodity programs over the next ten years, and there are good program tweaks that should help new farmers. Check out USDA’s breakdown of programs and information on additional support for new farmers going forward.
Crop insurance – rather than direct payments – have become the most important component of the nation’s “farm safety net.” Crop insurance programs are a hybrid public-private system in which the government pays a portion of the farmer’s premium but the policies are sold and managed by private companies. The Farm Bill makes it easier for beginning farmers to afford insurance by reducing their premiums by 10 points during their first five years in business.
Outreach & Assistance for Socially Disadvantaged Farmers, Ranchers
USDA uses the phrase Socially Disadvantaged Farmer/Rancher to describe African American, Latino, Native American, immigrant, and women producers—all groups that have historically suffered discrimination by USDA.
Many USDA lending and conservation programs include set-asides to serve these populations, but the “2501 Program” is specifically designed to support development in these communities. Interestingly, while 92 percent of America’s farmers are white, the latest Agricultural Census shows the number of minority-operated farms has increased since 2007, with Hispanic operators growing by 21 percent. This program helps support the growing diversification of American farmers.
The Farm Bill also includes resources to support veterans transitioning into agriculture. Specifically, USDA will establish a Military Veteran Agricultural Liaison position to work with veterans interested in making this shift.
The bottom line is that there are many resources available. New farmers and ranchers should visit USDA’s website and make a trip to their local FSA, NRCS, or Rural Development offices to discuss how these programs can help them build their farm and ranch businesses.
Want to learn more? You can check in with USDA, contact the Farm Service Agency, Natural Resources Conservation Service, Risk Management Agency, or Rural Development offices in your state to learn about implementation plans.
You can also check in here for updates as the USDA rolls out these new programs and policies.
Read previous blogs in this Farm Bill series, including: