Matched Savings Program Builds Next Generation of Farmers and Ranchers

The first Individual Development Account program specifically targeted to beginning farmers is currently underway in California. This Beginning Farmer and Rancher Individual Development Account uses special matched saving accounts to promote a new generation of farmers and ranchers by assisting those of modest means to establish a pattern of savings. The account proceeds may be used toward capital expenditures for a farm or ranch operation, including expenses associated with the purchases of land, building, equipment, infrastructure, livestock, or toward training.

For numerous aspiring farmers and ranchers the actuality of starting their own operation is out of reach.  One of the biggest obstacles to new farmers is financing the land and the farm operation.

California FarmLink developed the concept for the Beginning Farmer and Rancher IDA program and along with the Center for Rural Affairs has proposed that the 2007 farm bill institute a Beginning Farmer and Rancher Individual Development Account pilot program. The program would provide up to $10,000 per year for each account and be contingent on a local match of 20 percent.

This program could be essential for beginners when looking at business transfers involving retiring farmers and ranchers. This plan helps to minimize the burden on the new farmer as he or she is establishing their operation and decreases the risks of the retiring owner.

The program could also be beneficial to those entering niche markets or sustainable agriculture practices as many bankers have a difficult time funding non-proven strategies.

View the Center for Rural Affairs’ report “Giving a Beginner a Chance in the 2007 Farm Bill”, at http://www.cfra.org/policy/2007/beginningfarmer.   

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