This is a time of tremendous opportunity in farming and ranching for beginners looking to start a venture of their own. Alternative crops and high value markets offer profit potential and lower risk for new farmers than do commodity crops commonly priced at break-even levels. But regardless of the crop or market, farming depends on land access.
If land ownership is the preferred route, funding will have to come from savings, bootstrapping, investors/partners, or loans. There are no grants, or free money, for farm startup and operation.
Many beginners find financing at the U.S. Department of Agriculture Farm Service Agency, which has the lowest interest rate and programs for beginners, women, veterans, and minorities. Other lenders may provide more timely loans or have fewer eligibility requirements, and may be willing to deal with the extra risk that beginners present, but usually at a higher interest rate to reflect that risk. These lenders would eventually be the “graduation” goal for Farm Service Agency borrowers.
However, land ownership isn’t the only way to start a farm business. Renting land is a viable option and can be a lower cost than ownership. Rental or temporary land access may also open up other options to find land. Vacant urban lots, unused commercial property or acreages may be creative locations for the opportunity to start farming.
As an example, one persistent beginner located small pasture parcels that larger farmers didn’t want to mess with. He sub-rented these parcels, then hauled water, used temporary fencing, and moved his cattle herd from place to place. Landowners noticed his hard work and care of these properties, and in a few years, offered full farms to him to rent.
Resources, such as a discussion of financing strategies, can be found on our website, cfra.org.
By Wyatt Fraas, Associate Director of Farm and Community, Center for Rural Affairs
Established in 1973, the Center for Rural Affairs is a private, nonprofit organization working to strengthen small businesses, family farms and ranches, and rural communities through action oriented programs addressing social, economic, and environmental issues.
