A commentary by Randall J. Cochart, senior farm loan officer, Wisconsin Farm Service Agency.
Wisconsin's aging farm population increases each year. As older farmers retire, the state's rural population decreases.
Here is the problem: Population losses are not being replaced. Our next generation of farmers faces too many hurdles. Among them is the high price of land. If that isn't enough, add in rising operating costs.
However, for those who are established, production agriculture has been good. Agricultural output has been a bright spot in the nation's economy. Exports are strong. Farm income is healthy and stable.
Bridging the gap
The challenge today is to bridge the gap between issues. On one side, we have producers leaving the business, and on the other, we have producers wanting to start, but can't because of cost.
Here is the solution offered by the United States Department of Agriculture (USDA) Farm Service Agency (FSA). Connect the two parties with a way to help both.
FSA recently announced new incentives for older landowners to sell to younger or socially disadvantaged farmers. The incentives would hold down the buyer's costs, and simultaneously provide the seller better loan protection.
The plan offers options. It begins with an old concept but a new formula. The old concept is seller financing through a land contract.
FSA is offering the Land Contract Guarantee Program, which provides the seller with two options. Choose three years of assurance that regular payments would be covered by FSA if the buyer is late, or select a traditional 90-percent loan guarantee for up to 10 years.
If the buyer defaults, FSA pays 90 percent of the difference between the land contract price and liquidation recovery.
For the buyer, FSA has changed some rules. The FSA loan officer now has greater flexibility to consider all prior farming experience. This includes on-the-job training and formal education.
This is a way to add new health to Wisconsin's agricultural climate.
With FSA committed to helping sellers and buyers unite, the agency assures there will be a next generation of farmers attaining ownership, independence and success with their operations.
In its plan, FSA also seeks greater diversity in the agricultural industry. It seeks continued family ownership.
FSA is dedicated to the mission of making capital accessible to all Wisconsin citizens who want to farm, milk and raise livestock to produce nutritious food for America.
This is a chance for beginning farmers, minority and women producers, to investigate new opportunities in a gratifying career. Agriculture needs new blood.
FSA works closely with local lending institutions such as banks, credit unions and the Farm Credit System Cooperatives.
The goal is to provide better credit relationships and loan guarantees. The vision is to expand beyond traditional Wisconsin agricultural paradigms.
FSA wants to encourage locally grown food sold to Wisconsin consumers. It wants more families with the dream of establishing a dairy or growing produce for local farmers' markets. It wants to nurture dreams and build plans for the future.
Last year, Wisconsin FSA financed 512 beginning farmers statewide and 12 beginning farmers in Shawano, Menominee, Outagamie and Waupaca counties.
The Shawano Farm Service Agency Office serves farmers located in Shawano, Menominee, Outagamie and Waupaca counties.
For the dreamers, the planners, the next generation of agrarian entrepreneurs, now is the time to contact your local FSA office. Ask for the senior farm loan officer or another member of the farm loan staff team.
For more information about FSA and its changing loan regulations, go to www.fsa.usda.gov.