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Beginning farmers receive a competitive edge

Beginning farmers receive a competitive edge

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Nebraska’s Beginning Farmer Tax Credit Act (NextGen) and nationwide land linking programs offer opportunities for beginning farmers or ranchers to compete with established operators, accomplishing the goal of becoming independent farm owners.

Modern agriculture and production having increasingly high costs and demands when beginning an operation, International Farm Transition Network (IFTN) board member and UNL extension educator Allan Vyhnalek said, a number of beginning farmer or rancher programs provide options which can assist in the initial investment and prove to be beneficial for individuals wishing to start their own business.

“Traditional row crop farming is so expensive to start with because you have such a huge machinery investment and an even bigger land investment that most people will have a hard time entering farming unless they have substantial help from somebody,” Vyhalek said.

Programs offered in Nebraska through the Department of Agriculture, The Beginning Farmer Tax Credit Act, known as NextGen take a unique tax credit approach to provide opportunities for beginning farmers or ranchers.

Joline Gordon, Nebraska Department of Agriculture Negotiations and NextGen program staff member said, this program can give aspiring and beginning farmers an opportunity to compete against established farmers for land lease bids.

“NextGen helps beginning farmers compete with established farmers,” Gordon said.

Those who apply and meet the beginning farmer or rancher requirements, have the opportunity to sign a lease with a landowner who will also receive an incentive for giving a new farmer an opportunity to begin their farming or ranching business.

Nebraska’s NextGen program offers refundable tax credits to landowners who sign a three-year land lease with unestablished producers through the NextGen program.

Tax credits include a refundable Nebraska income tax credit for a minimum of the three-year lease signed with an eligible beginning farmer or rancher, landowners also will receive a refundable tax credit equal to 10% of the cash rent of 15% of the value of the share crop rent received each year for the three-year lease agreement.

Not only do programs through the Nebraska Department of Agriculture give aspiring farmer and ranchers an edge, but a number of national and statewide programs also offer unique opportunities for young or beginning farmers, but taking a different approach.

Programs in a number of states also include a process of matching beginning farmers seeking land and production opportunities with landowners who do not have family succession plans, but want to continue their farms legacy.

“The land matching part of it, I would say that is a good place to start looking at what land might be out there,” Nebraska Center of Rural Affairs Succession Consultant Wyatt Fraas said. “What is valuable about those programs is you can see what people are offering, what types of land is out there, the types of things they are looking for in a tenant, or a buyer, or a partner.”

Center for Rural Affairs offers online resources for beginning farmers to locate programs by state or region, aiming to provide new farmers with resources.

“That information is valuable for looking around a beginners own community, to see where the opportunities are for someone who may be in that situation (aspiring to farm but may not have a family operation to take part in) or those who may be getting of age where they are going to start thinking about retiring soon,” Frass said, “Being able to identify those situations is a benefit for someone who is from a rural area but may not have their own family to work with.”

Other organizations such as, IFTN can assist beginning producers through consultation services and getting in contact with the proper individuals.

In terms of succession consultation services, Fraas said, his personal recommendations for aspiring farmers and ranchers begin with three guidelines.

“There are three main things new farmers generally need, one is land . . . and they need financing, sometimes those are two sides of the same coin, because if you have financing, you can get land, but most beginners can’t get enough financing to outbid their neighbors,” Frass said, “So there are two separate parts to that. The other piece is experience, even if they get a lot of book learning from school and study resources that are out there, it takes some hands on working experience to know whether the information they have gotten off of a farm will actually work on a farm.”

Between programs offered across the nation and other resources, Frass said, it is possible for aspiring farmers or ranchers to start their own business.

“The things that people do the most who are not in a family operation that can bring them right in, they are starting small and starting with higher value or higher margin types of businesses,” Fraas said. “Yes, it is possible to get into farming and to make a living farming, even if your not part of a farming family.”

elise.balin@starherald.com

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