The Prairie Star, MT
03-31-06
Beginning farmer provisions ‘hot topic' for next farm bill
In less than 10 years, David Hommel of Eldora, Iowa, has graduated from
beginning-young farmer status.
Although he is still young, the 30-year-old is no longer a “beginning farmer.”
After graduating from Iowa State University in 1997, Hommel returned home
to Central Iowa to farm with his father, Tim, and splits ownership and farm work
with him 50/50.
“Right now, I'm pretty optimistic about my future. Back in 1997, I had a lot of
concerns,” he said.
For Hommel to be an equal partner along side his father, the family had to redo
the business plan with the help of ISU farm transition seminars. They decided
they would need to rent and buy more land and expand the hog operation.
“For me to be able to farm, we had to step it up a notch,” he said. “We had to
figure out a way to generate enough income to support a second family.”
Because land is hard to come by and expensive, it was easier to add livestock,
he said.
The Hommels were able to add land to grow corn and soybeans. And, they
tripled their hog operation to raise 150 sows for their farrow-to-finish operation.
Early on, Hommel worked off the farm job to help pay for his share of land and
to purchase gilts. Also, he took advantage of a beginning-farmer loan program.
“It's good for young farmers because most of us have so little money,” he said.
Hommel noted the high prices of land and start-up costs as setbacks for many
young or beginning farmers.
“It's something out of control from a young farmer's point of view,” he said. “For
a 30-year-old to buy land is pretty much not going to happen.”
Hommel is not alone in his struggle to begin farming.
Many lawmakers agree provisions for young and beginning farmers may be the
next “hot topic” for the 2007 farm bill.
U.S. farmers older than 55 control more than half the farmland. The number of
entry-level farmers has fallen by 30 percent since 1987, when there were about
350,000 farmers 35 years old or younger, according to the Center for Rural
Affairs in Lyons, Neb.
These numbers may only worsen without protections for young and beginning
farmers, said Traci Bruckner, policy analyst for the center.
Current trends show there will be fewer than 70,000 young people farming in
2007 when the next farm bill is approved, she said.
Beginning-farmer provisions have become a national concern because of high
land and energy prices, said Beth Levine, press secretary for Sen. Charles
Grassley, R-Iowa.
“Soaring land prices, high-energy inputs like fuel and fertilizer, and low
commodity prices make it tough for new farmers to get started,” she said.
“Ensuring that young and beginning farmers have the necessary tools to be in
the business of farming must be an integral part of the next farm bill.”
Grassley would like to see beginning-farmer loan programs offered through the
Farm Service Agency and the Extension Service.
USDA Secretary Mike Johanns included provisions for beginning farmers during
his 2007 farm bill listening sessions held nationwide.
“Secretary Johanns really played it up in his farm bill listening sessions,”
Bruckner said. “This is the time to do something about it.”
The 2002 farm bill launched a Beginning Farmer's Land Contract pilot program.
It allows beginning farmers a quick guaranteed loan that provides up to two
annual payments should the purchasers not be able to make a payment, she
said.
“The idea is the seller has a little more security, and they will be less likely to be
afraid to sell to a beginning farmer,” she said.
Bruckner said the program was not used much but the Center for Rural Affairs
wants to see it available in more states.
Also, she said programs such as the Beginning Farmer and Rancher
Development Program, authorized in the 2002 farm bill, would have been the
first USDA program other than farm credit/debt financing programs targeted
specifically to beginning farmers had it been funded.
This program emphasizes financial training, mentoring and networking.
“It's important we connect them with people who have done it,” she said.
Bruckner said people from various groups are interested in provisions for young
farmers in the farm bill.
“How can it have much opposition? It's dividing up the pie that gets
controversial,” she said.
Mike Duffy, co-founder of the Beginning Farmers Center at ISU, said beginning
farmers typically lose when the government divides up the subsidy pie.
“We're in kind of a conundrum,” he said.
The current payment systems are based on the amount produced to the
advantage of larger producers, who are not typically young, beginning farmers,
Duffy said.
“It's having an adversary effect on beginning farmers,” he noted.
Duffy would like to see payment systems added that support the amount of
labor done and, thus, benefit young beginning farmers.
“We could implement a labor-based program rather than a commodity-based
one,” he said.
Also, Duffy believes farmers could benefit from tax relief.
Beginning farmers could see income tax breaks. The government could offer
exemptions from capital gains tax for existing farmers who sell their land to
beginning farmers or other tax advantages for existing farmers who help
beginners, he suggested.
“Rather than paying them through subsidies, allow them to pay less taxes,” he
said.
Duffy said young or beginning farmers shouldn't give up hope, no matter what
conditions are added or not added to the 2007 farm bill.
However, because the concept of helping young farmers is getting a lot of
attention, there is a good chance they will be looked after in the farm bill, he
said.
“At a minimum, I would like to make sure we follow the Hippocratic Oath, and
that's to make sure we don't do more harm,” Duffy said.
Bruckner said beginning farmers were listed in the 2002 farm bill under different
titles but there were not many specific programs to aid them. Down the line,
beginning farmers could benefit from having their own title in future farm bills.
“It's an intriguing idea. It would be interesting to see (beginning farmers) under
its own title because in the past it has always been included under something
else,” she said.
Until that time, young farmers struggle to get by.
Hommel thinks it is worth the struggle but hopes young farmers will not be
forgotten when the 2007 farm bill is written.
“Young farmers are the future, whether you have pigs, corn, wheat or sugar
cane,” Hommel said.
“The next farm bill is going to change how everyone operates. Direct language
in the farm bill that includes young farmers is very important.”