Maybe you were raised on a farm and you’ve always known that one day you would follow in your father’s footsteps, or maybe you grew up in the city or suburbs and longed for a life in the country. Either way, your goal in life is to feed our growing population. So you might ask, “Where do I begin?”
One of the first things you need to do is experience farming first hand. If you grew up on a farm you might be thinking, “How much more hands on experience do I need?” More than likely, you already have a good skill set on the production side of operating a farm, but now it’s time to develop your skills on the management side. A good start would be to rent some farm land from a family member or a neighbor. This will give you experience in budgeting, bookkeeping, purchasing inputs, managing employees, and marketing your crop. Most lenders want you to have a couple of years experience in operating a farm before they will finance your first farm purchase. These developing years will give you an opportunity to purchase some equipment, unless you are lucky enough to work out an agreement with a family member or neighbor where you can exchange labor for the use of their equipment. Once you have management experience, your next step may be to purchase your first farm land.
If you have already reached this point, you may have been told you need a bigger down payment than you can possibly afford. By taking advantage of the Farm Service Agency’s (FSA) “Beginning Farmer Loan Program”, your first farm purchase may not be as difficult as you thought.
Your lending institution, along with FSA’s Beginning Farmer Program, could also offer some possible financing options including the Down Payment Program and the 50/50 Joint Financing Program. With the down payment program, you would place a certain amount down, usually 5% with 45/50 Joint Financing between FSA and your lending institution. With the 50/50 Joint Financing Program, there is no down payment and the loan is financed jointly through the FSA and your financial institution. Loan availability is subject to borrower meeting eligibility and credit guidelines.
