USDA’s Support for Beginning Farmers and Ranchers

USDA farmers.gov
By Sarah Campbell

– If you’re new to farming or ranching, access to capital is one of your biggest needs, whether it’s to purchase property or equipment, or to meet operating costs. USDA offers a variety of loans, which can help producers start or grow their operations.

We know the need is great, and we partnered with the Farm Credit Administration to hold a virtual lending summit, bringing together USDA and our commercial lending partners where we discussed ways to maximize opportunities for new farmers. During this event, a panel of beginning farmers and ranchers discussed their relationships with agricultural lenders and the Farm Service Agency (FSA) highlighting the importance of having a lender they can work with to grow their business.

“We need to encourage more people to follow the calling to farming and ranching, and we want people to know that USDA and other organizations have resources available to help,” said Bill Northey, USDA Undersecretary for Farm Production and Conservation. “As a farmer myself, I know the value of ‘virtually’ sitting around the table together with agricultural lenders and FSA so we can discover what is working well and where we need to make improvements to our programs.”

“This event solidified the first of many steps FSA and agricultural lenders plan to take to improve financing opportunities for beginning farmers and ranchers,” said Glen R. Smith, designated chairman and CEO of the Farm Credit Administration. “While there are many challenges, this event demonstrated that FSA and agricultural lenders are committed to finding ways to improve the opportunities for beginning farmers and ranchers, who are, after all, the future of U.S. agriculture.”

Some of the big takeaways from the day included:

USDA’s farm loan programs, direct loans, and loan guarantee programs provide access to credit and needed capital for agricultural lenders to work with beginning farmers and ranchers.
These producers have unique financing needs as they start, develop, and grow their operations.
In addition to providing access to capital, lenders play a critical role in helping beginning farmers understand their financial situations and are an integral part of many beginning farmers’ support systems, often serving as a resource for information and financial advice.
FSA is the lender of first opportunity for many new and beginning farmers. Our farm loan programs serve as a temporary source of credit with the intent of graduating borrowers to commercial credit.
Farm Ownership Loans can provide access to land and capital.
Farm Operating Loans can help pay farm operating expenses, open doors to new markets and marketing opportunities, and assist with diversifying operations.
Microloans can also provide an important source of financial assistance during start-up.
Each year, FSA targets a portion of its loan funds for beginning farmers and ranchers with 75% for Direct Farm Ownership, 50% for Direct Operating Loans, and 40% for Guaranteed Farm Ownership and Operating Loans, which are reserved until April 1 of each fiscal year.
Additionally, in 2020 we designated national and state-level beginning farmer and rancher coordinators. These coordinators represent efforts by FSA, NRCS, RMA, and RD. New farmers can get help directly from their state coordinators who they can find at farmers.gov/newfarmers.
In addition to loans, USDA offers other programs to producers and similarly has special provisions for beginning farmers and ranchers. These include:

Risk management through safety-net programs and crop insurance
Disaster assistance to help with recovery
Conservation assistance to help make key improvements to farms that are good for natural resources and farmers’ bottom lines.
To apply for farm loans and other programs, contact your local USDA Service Center. Find your office at farmers.gov/service-locator.

Sarah Campbell is USDA’s National Beginning Farmer and Rancher Coordinator.

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