Empowering Veterans to Thrive in Agriculture

Access to land is, of course, a significant challenge for any beginning farmer. There are many programs to assist in overcoming this challenge at the state and federal level. They primarily consist of farm link programs to match landowners with beginning farmers, incentives to landowners to make land available, and set-asides of government land for access by beginning farmers.

Most of these programs are available to any beginning farmer, but some do have special considerations or additional incentives for military veterans.

There are loans available to assist beginning farmers finance land purchases. These are covered under the “Financing” section.

Farm Link Programs

Iowa Beginning Farmer Loan Program (BFLP)

Ag Link is administered by the Beginning Farmer Center (BFC) at Iowa State University.

The program is a service to help preserve the family farm business by matching beginning farmers who do not own land, with retiring farmers who do not have heirs to continue the family farm business.

Ag Link maintains a database of potential beginning farmers and landowners. The BFC staff will help orchestrate matches and provide assistance throughout the transition process.

The Ag Link program not only assists beginning farmers in locating land but also in transitioning an existing farm business. This can assist beginning farmers by:

  • Providing access to land,
  • Providing access to equipment,
  • Establishing a mentor relationship,
  • Avoiding large debt needed for start-up costs

Ag Link is available to beginning farmers who:

  • Want find a way to pursue or continue their farming career,
  • Desire to farm but lack the financial means,
  • Are willing to invest sweat equity in return for an opportunity to farm, and
  • Are not currently a farm land owner.

The farmer does not have to be an Iowa resident, though non-Iowa residents must pay a $50 administration fee with their application.

  1. Complete the application. You can print it and mail or fax. You can download it, type your responses in the fields, then print and mail or fax (you can not save the form once completetd unless you have the full version of Adobe Acrobat software).
  2. If you are not an Iowa resident, there is a $50 registration fee for beginning farmers. Include a check made out to Beginning Farmer Center with your application. If you are matched with an Iowa farmer the $50 registration fee can be refunded.
  3. When the Ag Link Coordinator receives your application, he will place the information in our database of those interested in the program.
  4. When a retiring farmer contacts us to help find an interested beginning farmer or farm family, we go to our database to begin the matching process.

After you receive a call and an invitation to meet with a retiring farmer, you will be ready for the next step – meeting. What happens when you meet?

  • You will talk about your expectations and goals.
  • If your personalities gel and you both feel comfortable, together you will develop a transition plan to use as a guide as you begin working together.
  • We will help you complete a financial analysis of your farming operation in order to determine whether there is enough income for everyone involved to feel secure – that the finances are sufficient to meet expectations.
  • Each of you will exchange references – both personal and financial.
  • Both of you will talk to your own trusted advisors, such as your family, personal accountant, and lawyer, etc. to help you draw up a formal agreement based on your plan.

Veteran status is included in the Beginning Farmer Application. The applicant’s status as a veteran will be included in the database. This may be one factor retiring farmers consider when seeking a new farmer to whom they can transition the farm business.

More information and the application is available on the Beginning Farmer Center Ag Link website.

You can also view current opportunities posted by retiring farmers.

Contact the Beginning Farmer Center staff at:

Beginning Farmer Center
10861 Douglas Avenue, Suite B
Urbandale, IA 50322
877-BFC-1999
bfc@iastate.edu
Practical Farmers of Iowa's Find-a-Farmer

Practical Farmers of Iowa (PFI) provides this program to help facilitate the exchange of land from one generation to the next.

Both beginning farmers looking for land and landowners seeking a beginning farmer can register and post their information online. It will then be available for other users to view via the Find-a-Farmer interactive map.

Find-a-Farmer facilitates matches between landowners and farmers. This may benefit beginning farmers by:

  • Facilitating conversations between landowners and beginning farmers,
  • Providing access to land, and
  • Potentially creating a mentorship relationship.

This PFI program is available to beginning farmers.

PFI defines a beginning farmer as “someone who has 10 or fewer years experience managing his or her own farm business.

  1. Visit www.findafarmer.net.
  2. Complete and submit the registration form.
  3. View the interactive map to find landowners.
  4. Send messages to landowners you’d like to contact.

This program currently does not contain specific considerations for military veterans.

More information and current land available can be found on the PFI website.

To learn more contact:

Practical Farmers of Iowa
600 Fifth Street, Suite 100
Ames, IA 50010
515-232-5661
info@practicalfarmers.org

Landowner Incentives

Iowa Beginning Farmer Tax Credit

The Iowa Beginning Farmer Tax Credit (officially titled the Agricultural Assets Transfer Tax Credit) is administered by the Iowa Finance Authority’s Agricultural Development Division.

The program provides an incentive to owners of agricultural assets to lease farm land to beginning farmers by providing a tax credit on state income taxes. The tax credit is available for leasing of agricultural land, buildings, machinery and equipment, and breeding livestock.

A tax credit is also available to landowners who hire a beginning farmer to custom-farm agricultural land.

An agricultural asset owner may obtain a tax credit for each lease with a qualified beginning farmer.

This program provides a 7% tax credit to landowners who enter into a cash-rent lease and a 17% credit for crop-share leases.

The program assists beginning farmers in a number of ways, including:

  • Promotes land access for beginning farmers,
  • Promotes crop-share lease contracts, which distribute cost and risk to both landowner and tenant,
  • Potentially decreases rent for beginning farmers, and
  • Ensures a lease term beyond year-to-year.

Beginning Farmer Qualifications:

  • The beginning farmer, as well as any partners, shareholders, or members must be Iowa residents.
  • Must have a low or moderate net worth. For 2013, the maximum was $678,731.
  • Must have sufficient education, training, or experience in the type of farming pursued.
  • Must have adequate working capital, equipment, machinery, and livestock for a success farm operation.
  • Must materially and substantially participate in the farming.

Asset Owner Qualifications:

  • The owner must be in compliance with Iowa’s “Corporate Farming Law,” found in Chapter’s 9H and 9I of the Iowa Code.
  • Must be in compliance with all Iowa Department of Natural Resources regulations regarding animal feeding operations.
  • Must not be a habitual violator of animal feeding operation regulations.

  1. Both the beginning farmer and the asset owner submit applications by the 1st of every month and no later than September 1 of the year the credit will be claimed.
  2. Both parties must provide supporting documentation.
  3. Both parties pay applicable application fees.
  4. Both parties receive an approval letter.
  5. The asset owner will receive a tax credit certificate by January 31.

The Iowa Beginning Farmer Tax Credit contains an additional incentive to landowners who lease farm land to a beginning farmer who is also a military veteran.

If the farmer is a veteran, the landowner can receive an additional one percent tax credit on state income taxes during the first year of the lease. The additional one percent applies to both cash-rent and crop-share lease arrangements.

More information is available through the Iowa Finance Authority (IFA) website.

You can contact the Iowa Agricultural Development Division of IFA here:

Steve Ferguson
Program Planner
Agricultural Development Division
Iowa Finance Authority
2015 Grand Ave.
Des Moines, Iowa 50312
(515) 725-4919
Email
Iowa Beginning Farmer Loan Program (for Landowner Contract Sales)

The Beginning Farmer Loan program is also administered by Iowa Agricultural Development Division. This program is also listed on the “Financing” page as it is usually lenders making loans to beginning farmers that take advantage of the program. It is also listed here because landowners who sell land on contract (also referred to as “installment contracts” or a “mortgage for deed”) are also eligible for a federal and state tax deduction on interest payments for farm land sold to a beginning farmer.

The IADD issues federal tax exempt bonds and interest from the loans or contract sales are also exempt from state taxes. This allows the lender or seller to offer a lower interest rate to the farmer.

IADD does not set the interest rate, and the terms of the loan, including interest rate, length, prepayment options, service fees, and repayment schedule must be negotiated between the borrower and lender or seller. The maximum loan amount is $501,100 as of January 1, 2014.

The BFLP’s tax exemption on interest provides a strong incentive for lenders and seller’s to provide credit to beginning farmers. It also provides leverage for the borrower to receive a lower interest rate. The rate for BFLP loans are typically one to four percentage points below the prevailing market rate.

Using the program under an installment contract directly with the landowner also provides certain benefits. The landowner will receive interest payments and capital gains taxes will be spread out over the life of the contract. It may also allow beginning farmers with little or poor credit history the opportunity to access land without going through loan application procedures.

There are certain risks with installment contracts that should be explored.

This program is available to Iowa Beginning Farmers. To be a Beginning Farmer for the purposes of this loan the application must:

  • Be an Iowa resident,
  • Be at least 18 years of age at the time of application,
  • Materially and substantially participate in the operation of the farm and assume financial risk,
  • Own no more land than 30% of the county median,
  • Have a net worth of less than $691,172, and
  • Have sufficient education and training and access to machinery to operate a production operation.

  1. Obtain a copy of the Beginning Farmer Loan Program Application.
  2. Complete application with lender or seller.
  3. Negotiate loan terms, including interest rate, length of loan, prepayment options, service fees and repayment schedule with lender or seller.
  4. Submit application, financial statement, background letter, other required materials and non-refundable application fee to IADD by the 1st of the month.
  5. A public hearing will be conducted during the board meeting on beginning farmer loan projects, at which time, the IADD Board may approve the bond resolution.
  6. After adoption of the final bond resolution, all parties may close the loans.

Application deadlines for all Agricultural Development Division programs are the first of the month.

There are no considerations exclusive to military veterans in this program.

More information is available through the Iowa Finance Authority (IFA) website.

You can contact the Iowa Agricultural Development Division of IFA here:

Steve Ferguson
Program Planner
Agricultural Development Division
Iowa Finance Authority
2015 Grand Ave.
Des Moines, Iowa 50312
(515) 725-4919
Email
CRP Transition Incentive Program

The USDA Conservation Reserve Program (CRP) Transition Incentive Program (TIP) encourages retiring farmers with expiring CRP contracts to transition land to beginning, socially disadvantaged, and military veteran farmers and ranchers.

The purpose of the program is to make land available to new farmers while ensuring that land coming out of CRP is farmed or grazed in a sustainable manner.

This program is administered by the USDA Farm Service Agency.

 

The retiring farmer or rancher  must be an owner or operator of land enrolled in a Conservation Reserve Program (CRP) contract who has ended active labor in farming as a producer of agricultural crops or expects to do so within five years.

The retiring farmer must sell or lease the property to an individual or entity in one of the following categories:

The beginning farmer or rancher must be a person or entity who has not been a farm or ranch operator for more than 10 years.

A socially disadvantaged farmer or rancher is a farmer or rancher who is a member of a group whose members have historically been subjected to racial or ethnic prejudice because of their identity as a member of that group. For this program, gender is not included.

A veteran farmer or rancher is a person who has not been a farm or ranch operator for more than 10 years and who served in a branch of the United States Military. The specifics of this qualification are discussed further in the below section on “Veteran Uses.”

 

The 2014 Farm Bill included “Veteran Farmers and Ranchers” as a specific class of farmer with special benefits. One such benefit is that veteran farmers do qualify for the Transition Incentive Program.

The term “veteran farmer or rancher” means a farmer or rancher who has served in the Armed Forces and who –

  1. has not operated a farm or ranch; or
  2. has operated a farm or ranch for not more than 10 years.

Service in the Armed Forces includes the:

  • Army,
  • Navy,
  • Marine Corps,
  • Air Force,
  • Coast Guard,
  • Reserves,
  • Army National Guard, and
  • Air National Guard.

 

USDA Land Contract Guaranty Program

 

 

 

 

This program does not contain specific considerations for military veterans.

 

Land Set-Asides and Preferences for Beginning Farmers

Iowa DNR Lease to Beginning Farmers Program

The Iowa Department of Natural Resources (DNR) oversees the DNR Lease to Beginning Farmers Program. This program gives beginning farmers the first chance to lease DNR owned land.

Depending on the property and specific conservation and wildlife concerns the DNR leases may contain particular stipulations in regard to planting food plots, restricted forage cutting dates, and other conservation practices.

Each beginning farmer is limited to a maximum of 240 acres of crop ground under this program. There is no such limit on pasture land.

Land available for rent will be posted on the DNR Realty website by November 1.

This program provides several benefits to beginning farmers, including:

  • Access to land
  • Rent based on the market and costs of conservation practices rather than bids,
  • the potential for long-term leases (up to seven years), and
  • experience managing farmland with conservation and wildlife priorities.

Potential tenants must become certified as a Beginning Farmer. This requires:

  • Residency of the farmer in Iowa as well as all partners, shareholders, or members, if applicable.
  • A net worth below the established allowable net worth. For 2013 the maximum was $691,172.
  • Sufficient education, training, and experience, and
  • Material and substantial participation in the farm operation by the beginning farmer.

  1. Review available DNR land at the DNR Realty website.
  2. Contact appropriate DNR staff.
  3. Submit an application for certification to the Agricultural Development Division of the Iowa Finance Authority.
  4. Submit a financial statement for the beginning farmer, witnessed by a bank officer.
  5. Submit a financial statement for the farm business.
  6. Submit a letter describing sufficient education, training, and experience.
  7. If certified, leases are awarded in December.

This program currently does not contain specific considerations for military veterans.

More information and current land available can be found on the DNR Realty website.

To learn more contact:

Todd Rozendaal
Land Management
Iowa Department of Natural Resources
515-281-8621
Email

Applications and supporting documents are submitted to:

Iowa Finance Authority
2015 Grand Avenue
Des Moines, IA 50312
515-725-4901
iadd@iowa.gov
Fencing Panels/5th Wheel Hitch

Veterans In Agriculture’s Equipment Donation Program is now accepting applications for those interested in either of the following items.

Item #1: Eight chain link wire fencing panels. These measure 6 foot tall and are approx. 10 feet wide.

Item #2: 5th wheel hitch that fits inside of a truck and can be used to pull a trailer or camper.

These items will need to be picked up in the Des Moines, Iowa area. Applications will be taken through November 1, 2018. Use this link for more information and to find the application form: https://veteransinagriculture.org/programs/farm-equipment-donation-exchange-program/

If you have additional questions contact us at info@veteransinagriculture.org

Farm Starts

Watch this space for details about an upcoming meeting that will discuss organic production.