Beginning Farmer Programs give young farmers a head start
January 9, 2012
Agriculture can be a difficult industry to get into. Land and equipment is expensive, and many times even if you can afford it, the land isn’t available. However, thanks to a program run by the Nebraska Department of Agriculture, beginning farmers have a chance to get into the industry.
The Beginning Farmer program is a program set up to benefit those wanting to start in agriculture, as well as those who have land to rent. “This program is important because people need to work with beginning farmers, and get them started because of the number of farmers that will be retiring in the next 10 years,” said Marian Beethe, program administrator.
“The Beginning Farmer Program was developed out of concern over retention of young farmers. From 1987-1997, the number of farms operated by full-time farmers dropped more than 21 percent, and the average age of farmers has increased from 49.4 to 52.5 years old. This is a trend Nebraskans want to stop in order to keep Nebraska’s agricultural economy healthy. Many farmers and ranchers have viable operations but do not have family members to work for or take over the business. There are many part-time farmers and ranchers who lack the opportunity to rent available land that will support a family,” according to the Neb. Department of Ag.
The program is user friendly, and connects those who are looking for land and assets to rent with those who have them available. The program has certain requirements for both parties.
Beginning farmer or rancher applicants should meet the following criteria:
• Farmed or ranched for less than 10 of the past 15 years.
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• Net worth is less than $175,000 for 2011.
• Is a resident of Nebraska.
• Will plan to farm or ranch full time.
• Has farming or ranching experience or education.
• Will participate in an approved financial management educational program.
• Will provide the majority of the daily physical labor and management of the farm or ranch.
Owners also have criteria they must meet. “An owner should be an individual(s) or a trustee, a partnership, corporation, limited liability company, or other business entity having an ownership interest in an agricultural asset located within the state of Nebraska, who is eligible to receive a Nebraska tax credit,” according to the department of ag.
Those interested in the program simply fill out an application, and once they are approved, they will be connected with landlords who are looking to rent their land. The benefits of the program go both ways, and helps beginning farmers compete with more experienced farmers.
Beginning farmer and ranchers will benefit from the program because it increases their chance to rent agricultural assets, gives them the opportunity to attend a Financial Management class and be reimbursed for the cost, and sign a three-year lease agreement on a farm or ranch.
The tax exemption for beginning farmers can be a huge income saver. For farmers and ranchers who use personal property for production agriculture or horticulture, up to $100,000 can be exempted for tax purposes.
Owners of agricultural assets benefit from the program by receiving a tax credit, plus a full rent payment, for three years, renting to a beginning farmer or rancher to increase retirement options and knowing the farm or ranch will continue in operation.
For the owners, they receive a refundable tax credit equal to 10 percent of the cash rent or 15 percent of the value of the share crop rent received each year for three years.
According to the Nebraska Department of Ag, “The Nebraska Beginning Farmer Programs are designed to help new producers get a head start in farming and ranching, while giving back to the farmers and ranchers who own agricultural assets and are still interested in being involved in the farming or ranching process.”
This head start is exactly what new farmers need. For two Nebraska farmers, the program has been a way to get started in the agricultural industry.
Tyler Hueftle, a 23-year-old farmer from Eustis, Neb., decided to come back to the family farm after attending college in Lincoln, Neb. However, his family did not have enough land to support both him and his parents.
Hueftle’s parents heard about the program on the radio, and he decided to check it out. He was matched with landlords in his area, and now farms 450 acres of corn and soybeans. In addition to the land he rents, he also runs a cow/calf operation.
The program helped him to get started. “I would definitely recommend the program to other people. It helped me out, and we need young guys to farm. Being able to have that 10 percent edge on the next guy really helps out with cash flow,” said Hueftle.
Another young farmer who has benefited from the program is 31-year-old Gordon Luebbe, from Utica, Neb. Luebbe grew up in Utica, and then left after high school. He became a pilot when he was a junior in high school, and took an aviation job after college. He used to fly for NetJets, but he and his wife decided that he was gone too much, and they wanted to get back into farming.
However, when Luebbe returned home, his father had already rented their land to another young farmer, and he did not want to take that opportunity away for the other person. That is where the beginning farmer program helped Luebbe start his own operation.
This is his second year in the program, and he is now farming 600 acres of corn and soybeans. Even though Luebbe now farms full-time, he still enjoys being a pilot. He flies a spray plane for Bennett Ag Service in the late summer, so he still gets to do the two things he really enjoys. However, without the beginning farmer program, he may not have been able to find landlords to rent land from.
“The tax exemption is pretty straight forward. However, the bigger part is it makes a guy look more appealing to the landlord. The landlords knew my family, but there are other people who want to rent the land as well. The program gives landlords that extra incentive. It catches their attention, and gives them a reason to give me a chance. That is the first point I really had that really got their attention,” said Luebbe.
He continued, “When you put me up against the big farmers, they can offer a landlord just about anything they want. When you are a beginning farmer, it helps to have something else to take to the table. It’s valuable in helping small guys get noticed.”
Even though his family already has a farm, Luebbe knows the challenges that beginning farmers face. He said, “It’s really hard to get into ag. It’s tough. I get to use some of my dad’s equipment, but it’s worn out. Programs like this really help out young farmers.”
He said, “We decided to give farming a try, and it’s worked out pretty well so far.”
For more information on the program, please contact the Nebraska Department of Agriculture.