Help is available for new farmers

3:57 PM, May 18, 2013  |  Comments
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Too often I hear there is no help available to get young people into farming or ranching in Wisconsin.

I have been told many times a young man or woman must inherit a farm or marry into a farm operation to get the opportunity to farm. Yes, getting started in any small business is a challenge. In today's economic climate, getting and maintaining jobs that offer great pay and benefits is a challenge for all. Adding into the fact that farms require large amounts of capital is another big challenge.

The USDA Farm Service Agency has been developed over the years and offers may great programs to assist farmers and help make for a better country. One area that has really been developed is the loan programs offered for beginning farmers and ranchers. There are many types of loans that can allow young adults to purchase inputs ranging from crop inputs to real estate to establish a farm operation.

One such loan program offered is the microloan program. The application process is simple and quick and up to $35,000 can be borrowed for such things as crop inputs, equipment, livestock, hoop houses and delivery vehicles. Interest rates are also below the current open market interest rates paid if funds are borrowed from traditional agriculture lenders.

Another great program is the down payment program. This program offers the young farmer the opportunity to purchase farmland with 5 percent down. The maximum loan is for 45 percent of the purchase price, and the remaining balance required to purchase the farmland may be obtained from a commercial lender or a private party. The Farm Service Agency can provide a 95-percent guarantee if the financing is obtained from a commercial lender. Another advantage is the participating lenders do not have to pay a guarantee fee. The maximum loan for this program is $225,000 of USDA FSA loan funds.

Another loan program to consider is the land contract guarantees program. With 5 percent down a young farmer can purchase land from sellers who are willing to sell and finance their land sale. With low interest rates paid on certificates of deposit this may be a great tool for a retiring farmer who wants to sell farmland and get a better financial return with limited risk. The farm is sold to a young farmer using a land contract to finance the purchase, and the Farm Service Agency offers guarantees of either a prompt payment guarantee or a standard guarantee. The guarantee period is for 10 years, and land contract payments must be amortized for a minimum of 20 years with no balloon payments during the 10 year term of guarantee.

There are several other loan programs available from the USDA Farm Service Agency. Additional information is available at the local USDA Farm Service Agency or via the USDA website. I would encourage any young people interested in a career as a farm operator to visit their local office. I would also encourage any adult who knows of young people who are interested in agriculture to provide guidance and encouragement, along with guiding them to the local USDA Farm Service Agency office.

Lakeshore Technical College Farm Business Instructor Greg Booher is a great resource to assist young individuals interested in agriculture in obtaining guidance and advice in obtaining a FSA farm loans in the area of financial management. Booher is an outstanding financial management educator and offers great classes and on-farm consulting to those who are interested. Greg Booher's phone number is 960-0551.

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