By the time the next Farm Bill expires in five years, 125,000 American farmers will have retired. This fact may well be the biggest threat to national food security, but you wouldn’t know it if you’ve been following this year’s Farm Bill hearings.

Instead, the conversation is about “managing risk” for the Big Five commodity crops (i.e. crop insurance, subsidies, and margins for large agricultural interests) and not about the challenges to our food system as a whole. The recent House Committee on Agriculture’s Farm Bill “Field Hearings” were dominated by established farmers, with little if any time for new farmers to talk about their needs. Here in New York’s Hudson Valley, a group of beginning farmers considered a trip to the Saranac Lake to participate in one of these hearings, but decided against it when we learned that there would be no time to add our experiences to the chosen panelists. Beginning farmers like us didn’t fare much better in similar Senate hearings.

That’s why it shouldn’t come as much of a surprise that the needs of the next generation have yet to be met in the current draft of the Farm Bill, recently approved by the Senate Committee on Agriculture.

The committee’s worst move was a 50 percent cut to the Beginning Farmer and Rancher Development Program. This grant program, originally authorized in the 2008 bill, funds all-important training programs for new farmers, from New Roots for Refugees in Kansas to the Maine Organic Farming and Gardening Association’s Journeyperson program. Reading the list of projects that this program supports, it’s hard to imagine half of them being eliminated.

The committee also failed to fund a matched savings account program that would help beginners raise enough capital to start a farm business. Matched savings accounts, or “Individual Development Accounts,” as they’re called in the Farm Bill, have huge potential to help new farmers, as demonstrated by programs run by Practical Farmers of Iowa and California Farmlink. The Individual Development Account program was authorized in the 2008 Farm Bill, but has yet to receive one penny through the appropriations process [PDF]. So, for now, it’s likely to remain nothing more than a good idea with no money attached.

Despite leaving new farmers out of the hearing process, the Senate Committee did take a few cues from the Beginning Farmer and Rancher Opportunity Act, a farm bill “marker” bill that outlines funding packages and rule changes that can help beginners.

For instance, the committee included changes to federal farm loan rules that would enable more apprentices and farmworkers to finance the purchase of farm land. If passed, the Farm Service Agency (FSA) would no longer require that farmers have operated their own farm for three years before qualifying for a loan. Rather, FSA would simply require that applicants have worked on a farm for three years. This particular rule has disqualified many otherwise well-qualified young farmers from using federal loan programs to buy farms. FSA would also be able to help more beginning farmers make down payments on farm property with updated loan limits.

Also from the Beginning Farmer and Rancher Opportunity Act, Vermont Sen. Patrick Leahy (D) led advocacy in support of the expansion of the purpose of the federal program that funds conservation easements to also promote “agricultural viability for future generations.” This seemingly small change could potentially have a big effect if the U.S. Department of Agriculture would fund and even prioritize conservation easements that include succession plans or provisions that would keep farmland affordable to farmers over the long term.

As the bill moves to the floor and eventually to the House, there is still time to fix the committee’s draft. One encouraging sign is that the Beginning Farmer and Rancher Opportunity Act just earned sponsorship from two Republicans in the House. Rep. Chris Gibson, from the Hudson Valley of New York, is the latest Republican to sign on. He joined Rep. Jeff Fortenberry of Nebraska, the bill’s original sponsor. If these two can convince their colleagues to follow their lead, it’s possible that the House could even improve on the Senate’s draft.

But really, if members of Congress want to do justice by the young people who are dedicating their lives to feeding the country, both houses should hold hearings especially for us. Beyond the valuable provisions of the Beginning Farmer and Rancher Opportunity Act, a comprehensive strategy is necessary to ensure the success of the next generation. And that strategy begins with elected officials that include new farmers in the national dialogue and make time to understand their needs.

A group of young farmers visiting Sen. Olympia Snowe’s office in Maine.

What exactly did the survey tell us? Not surprisingly, young farmers reported that capital and land access presented the biggest challenges, followed by lack of health insurance. On the flip side, they rated apprenticeships, local partnerships, and community supported agriculture (CSA) as the movement’s greatest assets.

The challenges

The challenge of getting capital into the hands of beginning farmers is closely tied to the types of businesses that they want to create. Lenders, from the USDA’s Farm Service Agency to the cooperative Farm Credit, are now faced with a very different customer. Instead of a few types of businesses with well-known outcomes — i.e. commodity corn or contained animal feeding operations (CAFOs) — these new farmers want to sell dozens of products directly to consumers. The lenders, who once merely had to multiply the price of a bushel of corn by the acreage, struggle to understand the economic possibilities inherent in farmers markets and CSAs. How do you predict a farm’s income, they ask, when it’s not based on the commodity market  – and the government guarantees that go with that market?

Rebecca Thistlewaite, who with her husband built a half-million-dollar farm business selling pastured poultry, eggs, pigs, beef, and lambs on rented land near Watsonville, Calif., was one of those new farmers challenging lenders’ assumptions. Needing a permanent farm home to build infrastructure, the couple embarked on a nationwide search for affordable land and eventually found a perfect “turn key operation” just two hours from Minneapolis-St. Paul. The 80-acre farm was complete with a poultry processing facility, a cooler, a freezer, and an affordable price tag.

Knowing that they wouldn’t get far with a traditional lender, they applied to the Farm Service Agency (FSA) for a farm ownership loan. After submitting their 30-page application, including a business plan backed by real numbers from their growing business in California, the couple was turned away. “The FSA didn’t believe it was possible in Minnesota,” Rebecca explains. “They didn’t understand the type of farming that we do.”

Other than questioning their business model, the county FSA office cited a USDA loan rule that farmers must file a “Schedule F,” the IRS tax form for farmers, for three years before qualifying for a farm ownership loan. The FSA’s own manual [PDF] doesn’t require a “Schedule F,” only participation “in the business operations of a farm for at least three years out of the 10 years prior to the date the application is submitted,” but local agents often use the IRS form to determine eligibility. Rebecca and her husband’s two years of Schedule Fs and five years managing other farms weren’t enough for local agents. “This county decided that they were going to stick hard and fast to the rules,” Rebecca recalls. After making one more unsuccessful application to the FSA in California, Rebecca and her husband shuttered their farm business and took other jobs.

The three-year managerial requirement, often misinterpreted by local agents, is just the kind of obstacle that the National Young Farmers’ Coalition is hoping to do away with in the next Farm Bill. We’re advocating for the Beginning Farmer and Rancher Opportunity Act of 2011, which would fix, fund, and continue USDA programs for beginners. The Act was introduced in the fall with bipartisan support in the House by Tim Walz (D-Minn.) and Jeff Fortenberry (R-Neb.), and by a cadre of Democrats in the Senate, led by Tom Harkin (Iowa). Answering to the top needs identified by young and beginning farmers, it’s a long to-do list for USDA and Congress.

The Act includes a microlending program, new provisions that would help farmers find affordable land, and continued priority for beginners in many USDA programs. In addition, the Act would reauthorize mandatory funding for a competitive grant program that enables nonprofits and universities to offer educational and business planning to beginners.

USDA = friend or foe?

This grant program funds the Land Stewardship Project’s “Farm Beginnings” course that helped Josh Reinitz reinvent his family’s Minnesota dairy into East Henderson Farm, a certified organic, 60-member CSA farm in 2009. Josh’s farm, located just a stone’s throw from where Rebecca Thistlewaite attempted to establish her business several years prior, illustrates the potential of the USDA to play a positive role within a changing and often difficult agricultural landscape.    

Josh’s father closed their family’s dairy in 1985; he sold off all but 40 acres and took a job off-farm. Despite hard memories and the pursuit of other interests in college, Josh eventually decided he wanted to work the land. After moving back to his hometown from Minneapolis, Josh and his wife began growing a big garden on the family’s property and enrolled in Farm Beginnings to see if they could build a viable business on his family’s remaining acres. After developing a comprehensive farm plan through the class, they launched their CSA in 2009.

Unlike with Rebecca’s experience, the USDA has been a big help in getting Josh’s farm started: The Natural Resources Conservation Service awarded the farm a grant to help him build a season-extending high tunnel, and the FSA just financed the construction of a new vegetable packing shed. Josh found that the agents at his local USDA offices were “not used to working with vegetable farmers,” but he describes them as “open-minded.”

Holistic management

With the Farm Bill process now on restart (after the congressional supercommittee meltdown), the National Young Farmers’ Coalition is taking those like Rebecca and Josh to meet their members of Congress to demonstrate why the nation needs a Farm Bill that is responsive to a changing farm economy. The Coalition is looking to Republican senators who have a growing number of diversified, direct market farms in their states, such as Sen. Olympia Snowe from Maine, to provide needed bipartisan sponsorship for the Beginning Farmer and Rancher Opportunity Act.

With tens of billions of cuts already on the table from supercommittee dealings, an outpouring of support is required to save good programs that are boosting farmers like Josh, and to begin to chip away at the underlying structural issues that are preventing farmers like Rebecca from achieving their potential. Citizens and farmers can help by asking their members of Congress to support the Act to give young farmers the chance of success that they as farmers — and we as a nation — clearly need.

Microloans could encourage young people to become farmers.Photo: Chewonki Semester School

But starting a business takes cash, and a farm is no exception. For beginning farmers, the ability to come up with enough money for things like rent, tools, fencing, animals, and feed is likely to determine whether they’ll be in business at all.

In an ongoing survey of young farmers conducted by the National Young Farmers’ Coalition, 53 percent of respondents cited lack of capital as the biggest obstacle to starting a farm. A 2008 survey of 706 New York and New England farmers found that 25 percent of farmers were denied financing.

In the last farm bill, a new Individual Development Account program was created to help beginning farmers save money, but it has yet to receive any funding of its own. And assuming that the new penny-pinching House won’t be of any help, it’s probably time to think about alternatives.

The best opportunity may lie in the USDA’s 40-year-old Rural Youth Loan program. With a few changes in the 2012 farm bill, this program could be the microcredit that the next generation needs.

The Rural Youth Loan program was created to provide opportunities for youth living in communities with fewer than 50,000 residents to learn about agriculture and start income producing businesses. And by youth, they really mean it. Loans are given out to kids as young as 10 and as old as 20. A USDA video tells the story of the Hungate boys of Idaho, ages 9, 11, and 12, who were given a $5,000 loan to buy four cows. Drake, the eldest Hungate, reports, “we got really good interest — and we locked it in at 3.2 percent.”

In the 2012 farm bill, a new category of youth loans could be created for young people ages 21-35. The loans could double or triple the lending limit, but remain accessible for the young farmer with limited experience.

Adrian de los Santos, a former Farm Service Agency loan agent and now an outreach coordinator with the Texas Mexico Border Coalition, says that microcredit is “very much needed” for the farmers that he works with in rural Texas. “Fifteen thousand is not a lot,” says Santos, “but it could be enough to get started.” Santos points to farmers like Diana Padilla of Yahweh Farms, who is trying to get a loan to install a drip irrigation system on her diversified vegetable farm. Padilla can get a grant for the irrigation system from the USDA, but still needs cash to pay for the system up front.

The USDA does offer operating loans, but they’re geared for growers looking for bigger loans. “Because the Farm Service Agency requires the same amount of paperwork for a $100,000 loan and a $5,000 loan,” says Santos, “they shy away from making a small loan — unless it’s a youth loan.” Additionally, the managerial requirements for USDA operating loans overlook the entrepreneurial young person. Current rules require that operating loan applicants have a four-year degree in an agricultural field, some combination of vocational training, and on-farm experience, or farm ownership or management experience for an entire production cycle.

Frustrated at the lack of credit opportunities for small and beginning farmers, Santos is now organizing the Tip of Texas Farmers Co-op. “Tip-o-Tex” will offer access to a multi-farm CSA and small loans to its producers like Padilla. The initiative received initial funding through the Rio Grande Valley Empowerment Zone and will operate as a nonprofit organization and for-profit business. The co-op will operate as a typical for-profit business and the nonprofit side will offer producers loans, marketing, and start-up assistance.

Non-governmental organizations, like the one that Santos is forming, have been picking up the slack on existing federal credit programs for some time. Innovative projects like the Carrot Project, California Farm Link’s individual development account program, Northeast Organic Farming Association of Vermont’s revolving loan fund, and the Maine Organic Farmer and Gardeners Association’s organic farmer loan fund demonstrate the need for and the potential of microcredit for small farmers.

But these programs can’t be expected to meet the needs of an entire generation of new farmers alone. Vilsack’s call for 100,000 new farmers requires action at the federal level. The Rural Youth Loan program, designed to provide the nation’s youth their first experience in agriculture, may be that opportunity.

More and more Millennials are rejecting Cubicleville and instead opting for hands-on professions, including farming — and not a minute too soon.

Over the last hundred years, the number of young people in agriculture has steadily declined, from 1.8 million principal farm operators in 1910 to just 118,000 today, according to the USDA’s Agricultural Census. As of 2007, for each farmer under 35, there were six over sixty-five. Since 2002 there’s been a slight uptick in the number of farmers (not just the principals) between the ages of 25 and 34, but the overall number of farmers under 35 increased by only 2,000.

Unless an agricultural revival and major policy change begins now, the numbers of farmers will certainly shrink: the Wisconsin Department of Agriculture estimates that 500,000 farmers will retire in the next 20 years.

And that’s why U.S. Secretary of Agriculture Tom Vilsack recently called for 100,000 new farmers, and some of the few uncontroversial elements of the last Farm Bill were the handful of programs and provisions for new and beginning farmers. The government offers Beginning Farmer and Rancher Development Program grants (which provide funds for universities and nonprofits to train farmers) as well as direct loans to farmers to operate their farms or buy land.

The problem is, many young farmers say that they don’t know about these programs, are disqualified because of existing rules, or receive misinformation at the local level that prevents them from participating.

At the recent Young Farmers Conference at the Stone Barns Center for Food and Agriculture in New York, the speakers at a special policy workshop organized by the National Young Farmers’ Coalition, which I lead, shared their experiences with Farm Bill programs and ideas for change.

Loanerous terms

Cara Fraver of Quincy Farm was disappointed that she and her partner, Luke Deikis, were turned down for a Farm Service Agency (FSA) loan when they were looking to purchase land to start an organic CSA farm this year. The FSA makes low-interest loans to beginning farmers to operate, buy, or make a down payment on farm land, but the pair was disqualified because they lacked three years’ of experience operating a farm business. Instead, Cara and Luke had spent their last three farm seasons working at other CSA farms, saving money, and developing a business plan.

The USDA requires that loan recipients participate in the business operations of a farm for three years before applying for a loan to ensure a “reasonable prospect of success” for a farm. Applicants must prove that they were “more than a laborer” at the farms they’ve worked at by showing checks that they signed for the farm, bills addressed to them, or a written statements from the principal farmer describing their role on the farm.

Even with the right level of experience, the FSA loan approval process is proving too slow for farmers looking to buy land in competitive real-estate markets. Benjamin Shute, of Hearty Roots Farm in the Hudson Valley, considered applying for a loan to purchase land in his town, but needed to put in an offer on a farm before FSA could respond to his application. FSA doesn’t offer pre-approval, meaning that farmers can’t quickly bid on a property. Without pre-approval, loans are only useful in slower markets or in a situation where an existing farm owner can afford to be patient with a potential buyer.

Deer prudence

Another way the Farm Bill seeks to help beginning farmers is by reserving program funding for beginning farmers. One such program is the Environmental Quality Incentives Program (EQIP) that pays up to 90 percent of the cost of conservation structures and the implementation of good management practices. Five percent of EQIP funds are reserved for new and beginning farmers.

Recalling the experience building a deer fence with EQIP funds on her farm in Connecticut, Dina Brewster of The Hickories sees room for improvement. Dina needed three-quarters of a mile of fence to keep her fields of organic vegetables and fruit safe from local deer. After fronting $50,000 to build the fence, she became snared between competing USDA rules — those that made her farm certified organic and another set that suggested she maintain her fence with Round-up, a broad spectrum herbicide that is not on the organic list.

The conflict put the 90 percent reimbursement that she was promised — a business-breaking $45,000 — in jeopardy. Only after weeks of calls and letters to the agency did she get final approval and a check in the mail. Dina was thankful for the fence, but exhausted by the experience.

Are you listening, Mr. Vilsack?

The National Young Farmers’ Coalition hopes that USDA staff brought back these farmers’ stories to the Secretary of Agriculture. If he wants to see 100,000 new American farmers in the next few years, improving existing programs for young and beginning farmers can’t be overlooked.

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