Grants to Start a Farm

The farming population is aging. Many younger generations of farming families are finding it far easier and more profitable to simply sell their farmland to real estate developers. Recognizing the importance of farms and farmers, the government has placed a particular emphasis on helping new farmers begin their agricultural careers. It also dedicates significant resources to assist those small farms which are considered “limited resource farms” — that is, those farms which produce a low monetary value in sales and which support a family that lives below or at the national poverty level.

The U.S. Department of Agriculture (USDA) has developed a number of programs to assist these particularly-challenged categories of farmers and ranchers and to encourage younger folks to get into farming.

The Beginning Farmer and Rancher Development Program is managed by the National Institute of Food and Agriculture, a division of the USDA. It funds government programs and non-profit organizations via grants, enabling them to assist farmers and ranchers to start and grow their businesses. Services include help with marketing strategies as well as providing programs for land stewardship. At least one-quarter of the available funds must be provided for socially-disadvantaged farmers (those who have been subjected to racial prejudice such as African-Americans, Hispanics and Native Americans), limited-resource farmers, and farm workers who wish to obtain their own farms.

The Food, Conservation and Energy Act of 2014, part of the 2014 Agricultural Act, provides assistance for socially-disadvantaged farmers, as well as limited-resource and beginners. The program helps Tribal members and other individuals access the full USDA range of services and funding. It also helps them with reduced-paperwork applications and expedited decisions. This program also enables military veterans to obtain assistance with starting up a farm or ranch.

The USDA Farm Service Agency (FSA) offers a number of direct and guaranteed loans to assist farmers of all sizes for all sorts of purposes. But several are targeted specifically at beginning or limited-resource farmers. Some loans are designed for the specific purpose of transferring land from one generation to another at a minimal cost.

Direct Operating (OL) Loans are available for the purposes of paying the daily operating expenses of an established farm. These expenses include purchasing feed, seed and fertilizer, paying farm workers, and purchasing or maintaining equipment.

Farm Ownership (FO) Loans are provided for purchasing land, repairing and constructing farm buildings, and making improvements.

The FSA also offers socially-disadvantaged and beginning farmers the first opportunity to buy farmland when it is acquired, and provides a program for joint FSA-private lender financing for these categories of farmers.

The Farm Storage Facility Loan Program (FSFL) enables farmers and ranchers to borrow money for the purpose of building, maintaining and upgrading their storage and handling facilities.

Rural Youth Loans are available for young people, ages 10 through 20, who are interested in beginning an income-producing agricultural project. These loans are made to help provide young people with the business education and experience to enable them to pursue larger projects when they become adults. These projects are managed and supervised through organizations such as 4-H (Head, Heart, Hands & Health) or FFA (Future Farmers of America).

Microloans, or comparatively small loans, are also available through the FSA. These require less paperwork and involve reduced application criteria. They are targeted to smaller and niche farms and ranches that may require a smaller cash infusion for a specific purpose. Non-traditional experience, such as mentorship or apprentice programs and farm-work experience can satisfy the criteria for managerial and farm experience.

Be sure to consult the FSA website and others such as for financial and educational materials, especially in relation to developing a farming business plan. This is a critical step in applying for loans and grants, and the successful creation of your business plan can provide the difference in obtaining the funds you require.