Nebraska Begining Farmers Network

There is a little known group in Nebraska that is working together on beginning farmer and rancher issues.  The group, known as the Nebraska Beginning Farmers Network, brings together state, federal, and non-profit agencies to discuss and advance the number of beginning farmers in Nebraska.  What agencies are involved and how can they help?

Nebraska Department of Agriculture:

The Nebraska Department of Agriculture administers the Nebraska Beginning Farmer Tax Credit and the Beginning Farmer Personal Property Tax Exemption.

Farm Service Agency:

A federal organization which is part of the USDA, the FSA assists beginning farmers with both direct and guaranteed operational and ownership loans.  The FSA has also recently introduced microloans.  The FSA places an emphasis on assisting beginning and socially-disadvantaged farmers.

Nebraska Investment Finance Authority:

NIFA is a Nebraska agency which provides numerous financial resources, including the Beginning Farmer/Rancher program.  The Beginning Farmer/Rancher program allows for the purchase of land or livestock and machinery/equipment.  The Beginning Farmer/Rancher program works with banks and private sellers/lenders to facilitate loans up to $500,000 for land and $62,500 for livestock and machinery/equipment.  The loans are at below market interest rates because NIFA provides a bond to make the interest tax-exempt on both state and federal tax returns for the lender.

Other financing programs:

Other programs and agencies, such as Farm Credit Services and the Nebraska Department of Revenue, also have programs for beginning farmers.  Additionally, while programs such as EQIP and Value Added Producer Grants cannot be used for ownership, they are nonetheless powerful tools to start and/or expand your operation.

Other Network Participants:

The Network also includes organizations and agencies which provide non-financial assistance.   For example, the Center for Rural Affairs has a LandLink program to match established farmers with beginners as well as other information for beginning farmers.  Interested in learning the latest and greatest in farming innovations or just about an aspect of farming you are unfamiliar?  Check out the Institute of Agriculture and Natural Resources at the University of Nebraska-Lincoln.  Nebraska’s NRCS program also provides technical assistance to beginning farmers and ranchers.

There are other members of the Network which are listed on the Network’s webpage.   Take a look at it and I’m sure one or more of the participants will be able to provide you some knowledge, assistance, or other information that is useful to your operation.  And as part of the Network, you are always welcome to contact us!

Cover Crops and Crop Insurance — What do you need to know?

It is no secret that, year after year, more farmers are considering the possible benefits of cover crops for their cash crops.  But the question for many farmers is whether they can terminate the cover crops without sacrificing crop insurance coverage.

To help answer that question, USDA personnel who helped craft the new cover crop termination policy will be speaking at a webinar on January 23, 2014 from 2:00 to 3:30 p.m. E.S.T..  The webinar, hosted by the National Center for Appropriate Technology and the National Sustainable Agriculture Coalition, looks to be a valuable resource for farmers trying to determine the best path forward for their operation.

However, if attending the webinar is not your cup of tea, the cover crop termination policy is also available.  What are the highlights?

  • The linked policy is applicable only to non-irrigated land.  If the land is irrigated, the cover crop must be terminated prior to the cash/insured crop emerging.
  • The policy uses zones to determine when cover crops may be terminated.  Roughly speaking, western Nebraska is in zone 2 and eastern Nebraska in zone 3.  Most of South Dakota is in zone 2, with the exception of a small sliver of eastern South Dakota in zone 3.
  • For zone 2, late spring to fall seeded crops require cover crop termination 15 days or earlier prior to planting the cash crop.  Early spring seeded crops require termination of the cover crop as soon as practicable prior to planting the cash crop.
  • For zone 3, the cover crop must be terminated at or before planting the cash crop.
  • An early spring seeded crop are crops planted as early as possible after the spring thaw.  Examples would be spring wheat, spring barely, sugar beets, and corn.  Later spring planted crops are crops such as soybeans and dry beans.

The policy statement covers frequently asked questions, as well as some technical details.  You are also welcome to contact your resources at the USDA if you have questions about the new policy.  You are also welcome to contact us if you have any questions.

Value Added Producer Grants Available for Beginning Farmers

As the Center for Rural Affairs reminded me, USDA Value Added Producer Grants are now available.  What do you need to know about the grants?

First, the goals of the grant program is to generate new products, create and expand marketing opportunities, and increase producer income.  Beginning farmers, socially-disadvantaged farmers, and a small to mid-sized farm structured as a family farm (along with a few other categories) may receive priority in funding.

Approximately $10.5 million is currently available.  More funds may come available should additional funds be allocated to the program.  Grants are awarded on a competitive basis.  The maximum grant amount is $75,000 for planning grants and $200,000 for working capital grants.

Today, December 16th at 1:00 p.m. Eastern time, the USDA will hold a webinar about the program.  The webinar will be recorded so it is likely that it will be available for viewing at a later date.

More information on the process for applying for the planning or working capital grants is here.  Included in that information are templates for applying for a planning or working capital grant.  If you’d like to read the announcement of funding in the Federal Register, you may do so here.  A detailed fact sheet from the Center for Rural Affairs, including resources for help in completing the grant application, is here.  The deadline for applications is February 24, 2014.

If you have any questions, please feel free to contact us.  We’re always happy to help.

Farming Through The Generations; Is There Room For A First-Time Farmer?

An interesting post at FarmDoc at the University of Illinois posits that first generation farmers will continue to enter farming.  Data published in the article Attributes of U.S. Farms by Number of Generations the Farm has been in a Family in the Journal of the American Society of Farm Managers and Rural Appraiser (2004) indicates that the number of first-generation farmers in 2001 was 36% of all farmers across the random sample of farmers in 26 states.

The possible take-away from this data?  That while farming certainly does have aspects of generational transfer, there is evidence that first-generation farms are a significant portion of farming operations.  The article further argues that there is no evidence that this has changed in the intervening years.

If you are an aspiring farmer, the above is certainly reason to be cautiously optimistic.  If close to 40% of farmers are first-generation, it means there is room in the industry to break-in with your own operation.  It certainly isn’t easy (after all, a bit more than 60% of farmers are second-generation or more) but it is also certainly possible.

Of course, as a beginning farmer, you will still need an idea/plan of your operation; just because it is possible to begin an operation as a first generation farmer doesn’t mean it comes without careful preparation and planning.  It requires knowing not only your farming interests, but also your farming skill-set and the resources available.  Do you need to take a few classes to learn about livestock management?  Hate vegetable farming?  Currently have access to ten acres?   Knowing the answer(s) to these and many other questions are critical to starting your operation.

So, while being a first generation farmer may not have the same concerns as a second or third generation farmer, it is possible to begin your family farm legacy.  So don’t get discouraged if you are a beginning, first generation farmer; know that others beforeyou have trod the same road and succeeded!

Some pragmatic thoughts about leases

I’ve been working with and thinking about leases this week and, rather than delve into a legal issue, I think it is important to discuss some pragmatic issues.

When entering into a lease, do or think of the following (and note, this list is not inclusive of all issues, just some common items I’ve noted of late):

1.  Read the proposed lease.  Then read it again.  Make sure you understand all the provisions and how all the provisions related to each other.  If you have any concerns, questions, or just niggling doubt about something, discuss it with the other party to the lease and clarify any provisions in the lease as needed.

2.  Speaking of clarifying any provisions in the lease, you do not want any ambiguity in the lease.  Write the lease so there is not any doubt about what each party is/is not obligated to do.  Detail is your friend.  If you want a specific date for when rent is due, write it down.  If you require a certain type of crop rotation, write it down.  Be clear, be concise, and write it down.

3.  With that said, there is no need to get overly complicated.  If you have provisions in your lease that have absolutely no use, there is no need to include them.  For example, why have a section about organic practices if you and the tenant agree to conventional agricultural production?

4.  Sign the lease.  Do not negotiate all the details and then not sign a lease.

5.  Think about the long-term.  If your relationship with the other party goes south, are there provisions about how to terminate the lease?  Is the leased property vital to the continuation of your operation?  Consider your relationship with the other party and how your operation may be impacted should the lease end.

6.  Communication is the key to any successful relationship.  Communicate any problems, issues, or concerns you may have, especially before they become a crisis.

Leases have not only legal implications but also pragmatic implications.  Think through not only the legal implications but also, whether you can afford the rental price or whether the tenant will practice the agricultural practices you require.  Take the time you need to thoroughly negotiate and read the proposed lease terms.  Understand not only the lease but the implications of the lease on your operation.

Need further assistance?  Or have questions?  You are welcome to contact us — we’re happy to help!

Update on the Farm Bill

Negotiations continue about the details of the Farm Bill, including the amount of nutrition assistance via SNAP and commodity support.  The House and Senate conferees meet today to determine if there is any room for a deal.  Items that may be of interest, in no particular order:

At this point, it is unknown how negotiations will progress today.  When more information becomes available, we will let you know.