The goal of this page is to educate aspiring farmers on leveraging government resources in order to start farming.
To begin, every farmer and college student should be able to differentiate between loans and grants. Grants do not have to be repaid; loans do. Knowing that, let’s move on to discuss different funding options for beginning farmers.
“Free money” to start a farm can be sourced from federal, state, or local agencies. As far as farm start up grants that are federally funded, there is not a lot of consistency. Most of the USDA programs a farmer uses are delivered through three agencies: Farm Service Agency (FSA), Natural Resources Conservation Service (NRCS), and Rural Development (RD). A bill will be passed to further allocate money to young farmer loans/grants, specialty crop loans/grants, conservation reserve program (CRP) funding, or farms with an educational component. Once that bill is passed, applications will be sent into the United States Department of Agriculture (USDA), Farm Service Agency (FSA) or whichever government agency is in charge of allocating the funds, and checks will be sent out to deserving farmers.
The following is a list of questions to ask yourself before applying for a farm start up assistance from the FSA:
- “Are there any other USDA programs that might help in this situation?”
- “What are the requirements for me to participate in this program?”
- “Here’s what I’m planning to do. Are there any risks that I’ll be violating any USDA rules?”
- “Do I qualify for any targeted benefits based on my own situation or the situation of any of my farming partners?”
- “Do I have a farm number and am I listed as the operator?”
- In order to receive assistance, you farm has to be registered and have a farm number, and the applicant has to be listed as the operator.
- “Does my small specialty crop farm qualify?”
Federally Funded Loans
The purpose of the FSA loan program is as follows: “By providing access to credit, FSA’s Farm Loan Programs offer opportunities to: Start, improve, expand, transition, market, and strengthen family farming and ranching operations.” (FSA)
The goals of the FSA’s loan program are as follows:
- provide viable farming opportunities for beginning farmers, racial and ethnic minority farmers and women producers.
- Encourage value-added, direct sale, organic, and specialty crop operations
- Young People actively involved in agricultural youth organizations
- Urban producers
There are three type of FSA Loans:
- Farm ownership loans, which help you buy farms or farmland;
- Operating loans, which help you to buy supplies and equipment; and
- Emergency loans, which help you to recover from storms or natural disasters that damage your farm business
Below are a few examples of consistent start up loans that are funded by the FSA. This is not a complete list. Women, minority groups, and especially Native Americans qualify for the Socially Disadvantaged Farmers and Ranchers Loan. Anyone who is the operator of a farm and has been farming for under 10 years qualifies for the New Farmer and Ranchers loan.
Socially Disadvantaged Farmers and Ranchers Loan
Loans for New Farmers and Ranchers
The best resource that I found is a farm start up loan guide put out by the FSA: http://www.fsa.usda.gov/Internet/FSA_File/fsa_br_01_web_booklet.pdf. If you are interested in farm start up loans at all I highly encourage you to read this guide.
Federally Funded Grants:
Federally funded farm start up grants can be very inconsistent. Below is a guide for the grant award process.
“PRE-AWARD
The pre-Award phase begins with the announcement of funding opportunities for grants and involves the preparation, submission, and review of proposals to those announcements.
- Search — Search for grants and cooperative agreements
- Apply — Apply for a grant at Grants.gov
- Review — NIFA reviews your application
AWARD
The Award phase involves making funding decisions and notifying awardees of their selection for a grant.
- Response — Applicants are notified of the funding decision
- Processing — NIFA reviews, approves, and sends award documents to awardees
POST-AWARD
The Post-Award phase involves setting up accounts in the financial payment system and monitoring awardees for compliance with applicable laws, regulations, policies, and submission of required reports.
- Payments — Awardee sets up an account in the Automated Standard Application for Payments (ASAP) system to receive funding
- Monitoring — Awardee and NIFA each monitor grant activities to ensure compliance with specific program policies, regulations, and required reporting, including annual accomplishments reports
CLOSE OUT
The close-out phase of the grant lifecycle involves the submission, review, and approval of all final reports as required by specific program policies and regulations.
- Reporting — Awardee submits the final federal financial report and final technical report
- Review and Approval — NIFA reviews and approves final financial and technical reports for regulatory compliance and quality of final technical accomplishment descriptions” (USDA)
Here are links to current grants that are still accepting applications for funding: