Beginning Farmer

Farmer Veteran Fellowship Fund

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https://www.farmvetco.org/2019/01/17/2019-fellowship/

The Farmer Veteran Coalition has an exciting grant program that will be open for five weeks beginning February 1st, 2019 at 8 a.m. PST and closes on March 8th, 2019 at 5 p.m. PST.

What is in it for you?

The grant program will provide veterans with awards ranging from $1,000 to $5,000 to make purchases to help with launching of their farm business.

What do you need to do?

  1. Go to the link posted on the Fellowship Fund page at www.farmvetco.org/fvfellowship. between February 1st and March 8th, 2019.
  2. Complete the application. (The application consists of both short answer and essay questions and requires veterans to submit a business plan.)
  3. Submit Application.
  4. Wait for the award announcements in April.

Webinar

A webinar to review the application followed by a Q&A session will be held Wednesday, February 13 at 2:30 p.m. PST. Registration is limited to the first 500 participants, but a recording will be posted to the Fellowship web page after it’s completed. To register, go to https://attendee.gotowebinar.com/register/8095158054240674827.

Have any questions?

For eligibility and requirements, visit www.farmvetco.org/fvfellowship.

View a list of frequently asked questions by visiting www.farmvetco.org/fellowship/faq.

If you have any further questions you can call the Legal Aid of Nebraska’s Rural Response Hotline at 1-800-464-0258 or visit www.farmerandrancher.org.

To find more resources and programs for beginning farmers and ranchers please visit www.farmanswers.org, a component of the Beginning Farmer and Rancher Development Program and www.usda.gov/newfarmers

Some Thoughts As We Begin the New Year

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As 2014 quickly fades into the rear-view mirror, now is a good time to reflect.  The past year saw a number of changes to the agricultural landscape for beginning farmers.  In no particular order:

  •  The Farm Bill passed early in the year with a number of provisions aimed at beginning farmers.  From increased lending limits on microloans to increased cost-sharing for EQIP contracts and revival of the Conservation Reserve Program’s Transition Incentive Program, beginning farmers have some new resources at their disposal.  As we enter 2015, and before the crop year begins, now is a good time to research how many of the updates in the Farm Bill can help with your operation.
  • The Nebraska Department of Agriculture launched new websites for the Nebraska Beginning Farmer Tax Credit.  The NextGen website contains all the information and forms you need to apply for the Nebraska Beginning Farmer Tax Credit.  The website also lists upcoming workshops and clinics for young and transitioning farmers and ranchers.
  • The 2014 crop year was one in which some beginning farmers and ranchers faced financial headwinds.  The 2015 crop year may intensify those headwinds.  However, one-on-one clinics to discuss financial concerns are available throughout the year.
  • New crop insurance products are rolling out, including changes in the Noninsured Crop Disaster Assistance Program.  These products will assist beginning farmers weather the headwinds identified above.  These products also address how beginning farmers are farming in today.
  • And last but certainly not least, ARC and PLC are coming down the pike.  ARC and PLC replace direct payments.  Now is the time to begin considering what product to enroll in for the best potential benefit to your operation.

The upcoming year has the potential to change your operation, in both positive and negative respects.  If you ever want to take some time to discuss your operation, your options, and what programs are available, feel free to contact us.

SARE Report On USDA Programs

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SARE, the Sustainable Agriculture Research and Education arm of the USDA, recently released an updated guide titled Building Sustained Farms, Ranches and Communities: A Guide to Federal Programs for Sustainable Agriculture, Forestry, Entrepreneurship, Conservation, Food Systems, and Community Development.

The guide provides background information on 63 government programs, including programs in the 2014 Farm Bill.  Each description provides information on available resources, how to apply and, when applicable, how funding as been used.  Information is also included on finding appropriate funding programs and grant writing.

The guide is a wonderful resource, especially for beginning farmers and ranchers.  Take a look at it!

Changes in “experience” requirement for FSA direct farm ownership loans

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Until recently, applicants for an FSA direct farm ownership loan had to prove they participated in the operations of a farm for at least three years.  Beginning farmers identified this eligibility requirement as a barrier to land access, as the requirement was not reflective of current realities for beginning farmers.  However, the eligibility requirement has changed.

Now, a beginning farmer may substitute one year of the three-year requirement with a formal farm apprenticeship, operation or management of a non-farm business, leadership or management experience while serving in any branch of the military, advanced education in an agricultural field, or significant experience in a farm-related career.

Hopefully, this change will allow more beginning farmers access to direct loans from FSA.  If you need any assistance, feel free to contact us — we’re happy to help!

 

Updates to FSA Microloan Program

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The microloan program, operated by the Farm Service Agency, has recent changes that many farmers will likely appreciate.

First, the loan limit is raised from $35,000 to $50,000.  This means that farmers or ranchers applying for a microloan can now access up to $50,000 for expenses such as:

  • Start-up costs;
  • Input costs (e.g. seed, fertilizer, chemicals, utilities);
  • Marketing and distribution costs;
  • Family living expenses;
  • Purchase of livestock, equipment, machinery or the like essential to the operation;
  • Minor improvements such as wells;
  • Tools;
  • Delivery vehicles; and
  • Irrigation

The above is a small sampling of possibilities to use with microloan funding.

Also of note, microloan funding to beginning and military veteran farmers does not count towards the total number of years a farmer can receive assistance through FSA’s direct loan program.  If you are not a beginning or military veteran farmer, the microloan counts towards the seven year limit in which a farmer can receive FSA direct loan assistance.

If you have any questions about microloans, please feel free to contact us.  We’re always happy to answer your questions!

Nebraska Begining Farmers Network

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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!

Value Added Producer Grants Available for Beginning Farmers

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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.

Other beginning farmer and rancher resources

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I spent last week in McAllen, Texas at the National Institute of Food and Agriculture’s (a USDA agency) Beginning Farmer and Rancher Development Program conference.  And all I can say is that I was blown away with the resources, programs, and amazing people across the country who are dedicated to bringing in the next generation of farmers.

I mention this because all these resources, programs, and amazing people can be found at Start2Farm.  Are you interested in an apprenticeship program for fruit and vegetable production?  Or maybe dairy production is your interest?  Perhaps aquapontics?  Or maybe you want to learn about farm transitions to the next generation?  All these programs, along with many more, are available for beginning farmers.

All that is needed to get started is a simple search on Start2Farm.  Start on ‘Personalize My Search’ and pick those areas and topics which apply to you and your interests.  Or maybe you just want to search for programs in Nebraska; you can do that with the keyword search in the upper-right hand corner.  You can also explore the various topics addressed by beginning farmer and rancher programs under ‘Topics’ in the center of the page.

The possibilities are seemingly endless and are for almost every possible interest in farming or ranching.  So go and explore — you never know where the path may lead!

2014 Tax Exclusions, Exemptions Limits Released

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The IRS has released the 2014 tax exclusions, exemptions, and other information.  Of interest to this audience:

  • The unified credit (estate and gift tax, or basic exclusion) is $5.34 million in 2014.  Portability remains and the spouses can transfer up to $10.68 million tax free.
  • For an estate of a decedent dying in 2014, if special use valuation under section 2032A is used, the aggregate decrease in the value of the qualified property resulting from the use of section 2032A cannot exceed $1.09 million.
  • The annual gift tax exclusion remains $14,000 in 2014.
  • The loan limit for agricultural bonds for first-time farmers (“aggie bonds”) is $509,600.

Also included in the IRS notification are the 2014 tax brackets.  You may find this information useful as you begin tax planning for 2014.  (The information is on pages 5 – 7 of the notification.)

What does it all mean?  It means that there were no substantive changes to estate and gift tax in 2014 (as of this writing) and aggie bonds are available to first-time farmers.  Later this week we’ll go into further detail about estate and gift tax issues but for now, know that an individual will not pay federal estate taxes for a taxable estate under $5.34 million (or, if married, under $10.68 million).

In the meantime, should you have any questions, you are welcome to contact us!

To contract, the minds must meet.

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Along with consideration and acceptance, a fundamental principle of contract law is “a meeting of the minds”.

You intuitively know what a meeting of the minds is.  It is when the parties have a binding mutual understanding as to the essential terms and conditions of a proposed contract.  Without a meeting of the minds, a contract cannot be formed.

Keep in mind this is about essential terms of the contract.  In other words, a contract must be definite and certain regarding the terms and requirements; it must identify the subject of the contract (e.g. buying a specific tractor) and articulate the essential commitments and agreements about the subject.

Let’s take the example of buying a tractor.  What would the essential elements be?  In other words, what is the consideration?  Price is the obvious element we would need to agreed upon.  Perhaps delivery to your farm is essential; you would not otherwise enter into the contract.  If a certain model of tractor is the only one who can perform a specific function you need, delivery of that model is essential.  Does the color of the tractor matter or whether the radio is on the right or left of the console?  Most likely, not at all because you are concerned only that the tractor can perform the functions as required.

What is most important to keep in mind is that all parties to a contract should have the same, mutual understanding of all the terms in a contract.  The meeting of the minds is another good reason to have a written contract rather than an oral contract — you can review all the terms prior to signing the contract and you can always review of the written contract to refresh your memory  If you don’t understand what a term means, ask.  If you will not agree to a contract without specific requirements, include them in the contract and state that such terms are essential.

The above is a quick overview of the meeting of the minds and there are nuances in the law.   Curious about the nuances?   Or are you a beginning farmer and have further questions about contracts?  You are welcome to contact us — we’re here to help!