2014 Farm Bill Update: Beginning Farmer Programs

Final 2014 Farm Bill Update: Beginning Farmer Programs including BFRDP, Conservation Programs, Access to Credit and more

By Adam Warthesen of the Land Stewardship Project As you’ve heard the 2014 Farm Bill (Agricultural Act of 2014) was signed into law this past Friday by President Barack Obama.  The bill previously had passed the House 251 to 166, and the Senate 68 to 32. Below is a quick snapshot of beginning farmer provisions it the bill.  Overall strong gains were made for beginning farmers.  Thanks to you who made calls, held congressional visits, participated in sign-on letters as well as did other things to support beginning farmer provisions. Click READ MORE below for details.

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Beginning Farmer and Rancher Development Program (BFRDP):

The BFRDP program, which provides support to organizations training/assisting beginning farmers, was expanded to $100 million over 5 year ($20 million a year).  This is an increase in resources and duration from the last farm bill which was $75 million over 4 years.

BFRDP policy generally stayed the same (which is good).  Some of the purposes for which grants can be made changed, and there is a new recognition of veteran farmers in the program.  The one disappointing modification was a reduction in the set-aside from 25% of yearly funds to 5% of yearly funds for groups assisting socially-disadvantaged or limited resource producers.

Conservation for Beginning Farmers:  

The final bill maintains the conservation set-asides (5% each) for beginning farmers/ranchers and socially disadvantaged producers in the working lands programs the Conservation Stewardship Program and the Environmental Quality Incentives Program (EQIP).

Additionally, a policy change in EQIP means a beginning farmers or socially disadvantaged producers can receive a 50 percent advance payment.  This advance payment is aimed at helping beginning farmers cover the upfront cost of a project, which can be key if you’re just getting started. The bill also expands these conservation incentives to include veteran farmers as well.

The bill renews the Conservation Reserve Program – Transition Incentives Program and provides for $33 million to incentivize retiring landowners to sell or rent to a beginning farmers.  The program provides the retired/retiring land owners with two additional annual rental payments on land enrolled in expiring CRP contracts, on the condition they sell or rent this land to a beginning farmer or rancher or to a socially disadvantaged producer. Military veteran farmers will also be newly eligible for this program.

Access to Credit:

1.      The new farm bill makes the Microloan program offed by the Farm Service Agency (FSA) permanent. These microloans will be funded through FSA’s existing Direct Operating Loan program, and will have a maximum loan amount of $50,000, which is much lower than the $300,000 loan cap for regular FSA farm operating loans.

These loans are intended to cover smaller purchases and are especially attractive to young and beginning farmers. The microloan program features a simplified and streamlined application process, and will require less paperwork.  Additionally, microloans made to beginning and veteran farmers will be exempt from the term limits that otherwise apply on direct operating loans.  The new farm bill also provides a pilot program where intermediary lenders can partner with USDA to offer microloans.

2.      The new bill improves the Down Payment Loan Program, by increasing the total value of farmland to be purchased from $500,000 to $667,000. The bill maintains the loan programs priority focus on beginning and socially disadvantaged farmers.

3.      Policy improvements to Direct and Guaranteed Farm Ownership and Operating loans include:

• Increased flexibility in determining what types of experiences should count towards the “farm management experience” requirement for direct farm ownership loans, and
• Incentives (lower interest rates) provided to encourage joint financing – participation loans that bring together farmers, USDA, and a private lender in order to leverage federal credit with private lending resources.

Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers

One significant downside of the bill was a cut in the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers program, formally known as the 2501 program.  This program provides assistance to groups working with underserved farmers and farmers of color as well as tribal farmers.  The final bill reduced funding to $50 million over 5 years.  A substantial drop from the $75 million dedicated to this program in the 2008 Farm Bill.

Other notable beginning farmer provisions:The bill will makes it easier for new farmers to access federal crop insurance by giving beginning farmers a 10 percentage point reduction on their crop insurance premiums. The discount only applies to farmers in their first five years of farming.

The bill will address longstanding issues within the Value-Added Producer Grant program by clarifying the beginning farmer priority status for proposals submitted.  This critical change will allow grant proposals to be judged based on how well they serve small and medium-sized farms, beginning farmers, and socially disadvantaged farmers.

Thank You:

A big thanks to congressional champions who helped secure these new farmer gains into law. Lead authors of the Beginning Farmer and Rancher Opportunity Act (which was the marker bills for many of these new farmer initiatives and improvements) included: Rep. Tim Walz (D-MN); Rep. Collin Peterson (D-MN); Rep. Jeff Fortenberry (R-NE); Rep. Chris Gibson (R-NY) and Sen. Tom Harkin (D-IA).  Dozens of lawmakers ended up co-sponsoring the legislation which was folded into the final farm bill.

What’s Next:

Implementation, outreach, and analysis.  Before us is a slate of activities on implementation.  For example the agency, National Institute of Food and Agriculture, who oversees the Beginning Farm and Rancher Development Program, will start developing and Request for Applications.  This is then followed by making sure organization are applying for the program and then analysis of the program once it awards grants.

Many of the new/improved initiatives will require some rule-making or administrative action.  Stakeholder input is very important to making these programs responsive and successful.  Look for additional updates on how to engage. Ultimately, making sure beginning farmers and ranchers, socially disadvantaged producers, and military veterans are using these programs is a must.  Every group can help reach out to those constituencies to put these policies and funding on the ground for people. If you would like to participate in the political process please email adamw@landstewardshipproject.org.