Thursday, March 13, 2014

The Farm Bill for Beginning Farmers and Ranchers

The Agricultural Act of 2014 - otherwise known as the Farm Bill - contains news for beginning farmers and ranchers across the country. In total, it invests $444 million into beginning farmer initiatives over the next decade - a 154 percent increase from the 2008 farm bill. These initiatives generally fall under three categories:

1.    Beginning farmer and rancher training programs
2.    Financial assistance
3.   Conservation access and incentives

The following is a brief description of some of the specific initiatives in the Agricultural Act of 2014 that support beginning farmers and ranchers.

1. Beginning farmer and rancher training programs, such as the Building Farmers Training Program offered through CSU Extension, including right here in Chaffee County, are essential to the success of beginning producers. Plenty of passionate and intelligent young farmers adept in growing food are eager to get started; training in business planning, marketing, and financial analysis ensures they have the tools they need to succeed in the long run.
Beginning Farmers and Ranchers Development Program – this program, established by the 2008 farm bill, will be funded at $20 million per year through fiscal year ’18 for a $100 million total, up from $75 million in the 2008 farm bill. This program is the only federal initiative dedicated exclusively to educating beginning, socially disadvantaged, and veteran farmers. This provision is being hailed as a major success by NSAC and NYFC.

2. Financial Assistance
FSA Microloans – the Farm Service Agency’s (FSA) Microloan program was codified. The Microloan program is designed to better serve “the unique financial operating needs of beginning, niche and the smallest of family farm operations” (USDA). It does this by making applications to credit more flexible. In its first year, the program made 3,000 loans.
Direct Farm Ownership Loans – access to this FSA program was made more flexible too, expanding the definition of the required 3 years of experience to better reflect current training structures and opportunities for beginning producers.
Down Payment Program – given the ever-increasing price of land, the FSA Down Payment Program raised the amount it will provide for a down payment on land from $500,000 to $667,000. Also, “Retiring farmers may use this program to transfer their land to future generations” (USDA).
o   The above three FSA loan programs aim to increase access to credit with minimal interest rates for beginning farmers who would otherwise have trouble procuring credit from a commercial lender.
      Federal Crop Insurance – changes in this bill will make it easier for beginning farmers to access crop insurance programs by giving them a 10 percent reduction on premiums. Monetarily, this accounts for the largest provision for beginning farmers in the bill at $261 million over ten years.
      Value-Added Producer Grant – the bill makes clear that beginning producers receive priority in this grant program, which allows producers to create new products and expand markets to increase income.

3. Conservation access and incentives – many changes have been made to Conservation programs in this farm bill, primarily to consolidate and streamline its programs.
Agricultural Conservation Easement Program (ACEP) – this new program, which incorporates the existing Farm and Ranchland Protection Program, makes specific previsions to ensure conserved farmland remains in agricultural production, rather than say, be sold to estate buyers. This is language directly from the bill:
The purposes of the program are to… protect the agricultural use and future viability, and related conservation values, of eligible land by limiting nonagricultural use of that land. (Sec. 2301)
      This is in response to the growing trend of land in conservation easement with an associated Agriculture priority being bought by nonagricultural landowners. For more on this trend, see the NYFC’s Conservation 2.0 report here.·      
      Conservation Reserve Program – Transition Incentive Program (CRP-TIP) – funding for this program has been increased from $25 to $33 million. The Conservation Reserve Program pays farmers and ranchers to remove land from production for the duration of a 10-15 year contract, providing a source of income to producers, protecting and restoring environmentally sensitive land, and increasing future productivity on that parcel. The CRP-TIP program provides two more years of CRP payments to farmers whose contracts are expiring if they sell or rent that CRP land to beginning or socially disadvantaged farmers or ranchers who will use sustainable grazing practices, resource-conserving cropping systems, or transition to organic production.
·         Environmental Quality and Incentives Program (EQIP) – the final bill upholds language in this NRCS-administered program that sets aside funds for beginning farmers and also increases the advanced payment amount from 30 to 50% of a project, such as those in the Seasonal High Tunnel Initiative

Click HERE for more information on the Farm Bill

      *written by Guidestone's OSM/VISTA, Gunnar Paulsen

Friday, February 28, 2014

Conservation Opportunities for Farmers, Ranchers, and Agricultural Landowners: An Interview with Andrew Mackie, Executive Director LTUA

*This is the 3rd and final in a series written by Guidestone's AmeriCorps OSM/VISTA member Gunnar Paulsen about Guidestone's Colorado Land Link events forthcoming in March - the 2nd Annual Land Link Forum and Certified Farm Succession Coordinator Training.

The 2nd Annual Land Link Forum is coming up quick, March 7-8th to be precise! The theme of this year's Forum is Farm Succession Planning (see previous post for more on this topic) and one of the sessions we’re excited about is The Role of Conservation in Farm Succession Planning. I recently had a chance to sit down with Andrew Mackie, Executive Director of the Land Trust of the Upper Arkansas (LTUA), and ask him some questions about the session and panel he has assembled, the role of Colorado Land Link in meeting the conservation goals of LTUA, and about tools the conservation community offers for agricultural producers and farm succession planning.

Conservation has become an important tool for protecting and preserving farmland across America. Taking its inspiration from the founding of Earth Day in the 1970s, a movement of community land trusts started to take shape. Land trusts are non-profit, private organizations dedicated to protecting open space, which can include farmland, wildlife habitat and other sensitive landscapes. The primary tool for accomplishing this preservation has been the conservation easement. Conservation easements are agreements entered into between a landowner and a land trust that are mutually beneficial. In exchange for some limits on property rights, such as, say, where buildings can be placed, or where farming or grazing can occur, landowners receive tax incentives. When a parcel of land is put into easement, it is permanent; in the language of land trusts it is “protected in perpetuity.” To date, 2.7 million acres of farmland has been protected by conservation easement.

However, it is not always a sure thing that farmland protected by an easement will remain in agricultural production after that land is sold or the farmer retires (see an interesting report from the NYFC on this matter here). To this end, I asked Mr. Mackie what steps LTUA is taking to help beginning farmers and ranchers become conservation buyers. “We partner with Guidestone’s Colorado Land Link and have supported that program through its development” because, he said:

It is in the interest of the entire land conservation community to make sure that we have a strong, active community to take over these properties as the landowners decide to retire or move on to something else. It is in our interest to have educated, business-smart farmers and ranchers, and if we don’t, we’re going to have a hard time keeping that conservation value the way its intended to be maintained throughout time… Colorado Land Link helps connect us with those qualified buyers.

When it comes to helping farmers and ranchers succeed as conservation buyers, Mackie is frank that it is not just the work of one organization, but a network that includes NRCS, Cooperative Extension, and services like Colorado Land Link. “As an organization, we realize that agriculture has a very important role in both the preservation of open space and the economy of the United States. It’s only by working together that we’re going to keep that.”

I also asked what incentives exist in Colorado for non-agricultural landowners to rent their easement-protected land to farmers or ranchers and the first thing Andrew mentioned was the water rights principle of “use it or lose it.” This refers to the Colorado Water Law’s presumption that if a water right has not been exercised for a consecutive 10-year period it has been abandoned, at which point that right is placed on the abandonment list and can be given to another applicant. And if that happens, “they’ve just given up a private property right that they had that comes with a dollar value associated with it, sometimes a very high dollar value,” says Mackie. So, one way to keep your water right and to receive further tax breaks through Colorado’s statewide Agricultural Exemption Program is to rent your land for agricultural purposes, which of course will exercise a landowner’s water right. “Sometimes that can be enough for a landowner and they don’t need to recoup a lot from the lease because they’re making it up in tax savings.”

In looking forward to what attendees can expect to learn from the Land Link Forum’s conservation workshop on Friday March 7th – the panel of which includes Ginger Davidson of the Palmer Land Trust, John Stulp, Special Policy Advisor to the Governor on Water, Ben Guillon of WetlandsResearch Associates, Bill Gardiner of the NRCS, and Cindy Lair, StateConservation Program Manager – Mackie says “we’re really trying to give a broad perspective of all the conservation programs and services available to ag. producers.” This will include some of the traditional land trust programs, such as conservation easements, but also about “some of the more cutting edge stuff too, including the new water plan for the state of Colorado… and we’re going to look at other programs that provide economic benefit to landholders, such as wetland mitigation banking on agricultural land, programs such as EQIP (Environmental Quality Incentives Program), and Western SARE’s (Sustainable Agriculture and Research Education) programs. Our hope is that whether you’re new, or experienced you can become familiar with these programs and start plugging them into your overall plan for your operation.”

We’re excited to learn more about these innovative programs for farmers and ranchers and hope to see you there!  For information on other programming at the 2nd Annual Land Link Forum, and to register for the event (the registration deadline is March 3rd), click here.

Friday, February 21, 2014

Farm Succession Planning: A Critical Issue

*This is the 2nd in a series written by Guidestone’s AmeriCorps OSM/VISTA member Gunnar Paulsen about Guidestone’s Colorado Land Link events forthcoming in March - the 2nd Annual Land Link Forum and Certified Farm Succession Training.

Across America awareness is growing that we must support the dreams of the next generation of farmers and ranchers if we are to have healthy, economically viable food systems. The lack of capital and the rising cost of farmland have been touted as the two most significant barriers to land access for beginning producers. Yet, too often overlooked are “studies [that] show that over two-thirds of retiring farmers do not have identified successors and nearly 90% of farm owners neither had an exit strategy nor knew know how to develop one” (FarmLASTS Project Exec. Summary 2010).
In the U.S. it has historically been the case that when a farmer or rancher retired, an heir would step up and take over the family business and land. This kept the family legacy alive and was also a way to keep farming affordable for those that chose to pursue it. Yet, as reported in the FarmLASTS Project of 2010:
This traditional succession model of farmland transfer—passing a farm from an older generation to a younger one within the same family through purchase, gift, or inheritance—accounted for only about half of farmland acquisitions in the early 1990s. And in a Wisconsin study undertaken later in the decade, only 20 percent of beginning dairy farmers entered farming by taking over a family operation. It seems that the family succession pattern may be shrinking and alternative paths to farm entry may be increasing in importance.
In addition to this trend, American farming faces another alarming statistic: according to census data over 30 percent of farmers are over 65, and as those farmers retire over the next 15 years, approximately 70 percent of farmland is set to change hands (Kohn and White 2001). This level of change is unprecedented. And farmland isn’t always guaranteed to remain farmland during this transfer. In addition to industrial or residential expansion, Colorado farmers and ranchers face increasing pressure from municipalities to sell their water rights, without which a piece of land can no longer be used for agricultural production.
Many issues must be addressed to ensure the viability and vibrancy of our agricultural communities across Colorado and America, and one tool to address these immediate needs is Farm Succession Planning.
Farm succession planning is a complex process. At the most basic, it is the process of laying out a roadmap that charts the course of passing on land or agricultural enterprises to the next generation without also passing on crippling financial burdens. Considering that inheritance has traditionally been the means of transfer, farm succession planning is a relatively new service. And given the subject matter, engaging the topic is often emotionally and financially complex.
Those are a few of the reasons that support the development of a statewide network of Certified Farm Succession Coordinators who can reach out to families and walk them through this process to ensure their legacy goals are met and that agriculture continues to thrive across Colorado.
To this end, Guidestone has organized a Certified Farm Succession Coordinator Training (CFSCT) to take place March 4-6th at Mt. Princeton Hot Springs Resort in Nathrop, Colorado. This event will be facilitated by the International Farm Transition Network and will provide professionals the tools they need to engage in this emerging and increasingly important field. 
Directly after the CFSCT, Guidestone will present the 2nd Annual Land Link Forum with this year’s theme of Farm Succession Planning. The Forum is an opportunity for retiring farmers and ranchers, non-farming landowners, agriculture service providers, as well as the next generation of farmers to learn about all aspects of farm succession. There will be targeted workshops on conservation for landowners, financing opportunities for new and existing producers, and stories from young farmers and ranchers who have secured land tenure, including beneficiaries of Colorado Land Link services. 

There’s still time to register for both events; the deadline to register is February 28th. Find more information here.