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Is America ready for “share-farm”?

Is America ready for “share-farm”?

We have all seen the trend toward larger farms, especially for commodity crops, dairy and tractorlarge-scale poultry operations. Closely related to that trend is the loss of younger farmers, particularly in the types of farm sectors that require major investments to start. Simply said, if you don’t inherit a large-scale operation, you can’t afford to buy the farm, or even the equipment to farm. The logical, long-term outcome of those trends is either corporate ownership of all such farms or the end of the industry, especially in places like Maryland with high land values.

bfsWith a grant from USDA, University of Maryland Extension initiated a Beginning Farmer Success program in 2012 to help new farmers get started. Extension also collaborated with two non-profits: Southern Maryland Agricultural Development Commission which initiated a Mentor Match Program and Future Harvest CASA, which utilized the funds to enhance its Beginning Farmer Training Program.  These programs have been successful, particularly for vegetable, fruit and small-scale poultry producers. Both non-profits hope to continue to assist beginning farmers even after the grant period ends August 31st.

http://freshstartlandenterprise.org.uk/
http://freshstartlandenterprise.org.uk/

However, neither program has been able to help beginning commodity farmers or large-scale livestock farmers to get their start.

In the UK, a new program is getting started called  share-farm, a national “matching service’ to bring retiring farmers together with aspiring new entrants. The goal is to create a pilot farm business matching service for young or new entrepreneurs seeking land and joint ventures with owners who have land to offer.

Such a program would be very useful in the U.S.! Who is ready to take the lead?

 

 

Saving family farms in Maryland

Saving family farms in Maryland

Screen Shot 2014-12-18 at 9.34.32 AMFarming in the U.S. has gone through an incredible transformation in the last century, from highly diversified to highly specialized. Over that period, we’ve gone from 6.4 million farms to 2.1 million farms. Meanwhile, average farm size in the U.S. has increased from 148 acres in 1920 to 434 acres in 2012. Over the same period, Maryland went from 47,908 farms to 12,256 farms and average farm size has increased from 100 acres to 166.

From 1997 to 2012, the number of Maryland farmers age 65 and older increased by 12 percent farmoperatorswhile the number under age 35 decreased by nearly 25 percent.

It is interesting to note that in 1920 there were roughly the same number of farm owners 65+ in Maryland as there are farm operators now. However, there were 4,081 farm owner/operators <35 in Maryland in 1920 vs 603 farm operators <35 in 2012. This raises the question- who will replace our older farmers when they retire?

farmoperators.compareIn 2008, the Cooperative State Research, Education and Extension Service (CSREES) reported that 70% of U.S. farmland would change hands by 2028. Without adequate succession planning, CSREES reports that farms are more likely to go out of business, be absorbed by larger neighboring farms, or be converted for non-farm use. Studies have shown that family farms are only passed down successfully to the next generation about 30% of the time.

The next decade or so will be critical if we are to keep land in the families and/or create opportunities for others to farm.  I have been in this job as Director of Maryland FarmLINK for three years. I had hoped that by pointing out the challenges for beginning farmers, and helping them to identify farms for sale or lease, we would make great progress. We have not.

If we don’t succeed it would be a huge missed opportunity. Our region is home to the Screen Shot 2014-12-18 at 9.30.03 AMwealthiest population in the country and those residents are spending roughly $26 billion on food. We have good soils, a climate suited to produce most crops and better than average rain fall.

Either our region can benefit from those food expenditures or some other region will. But this is not just an economic issue. Great local food chains, from seed to servings, give us control over the quality of our food, food security and food safety.

The main challenges for farmers are getting access to land, having the infrastructure to farm, having the right regulatory environment and getting level access to the markets. Over the next few weeks, I will discuss the challenges and the solutions.

 

Farm succession plans needed, now more than ever

Farm succession plans needed, now more than ever

fam farmIn August 2012, I posted a discussion “Family farm successions and transitions” which highlights what I learned from the Farm Link and Transition Pilot Workshop held in Virginia. Last week, I had the opportunity to hear another excellent presentation on farm succession planning at the Farm Action Workshop held by the Maryland Farm Bureau and Nationwide Insurance and organized by local agent Carrie Polk. Therefore, I am revisiting the topic.

According to Don Schrieber, Director of Nationwide’s Advanced Consulting Group, only 30% of family businesses pass onto the second generation, 12% pass onto the third generation, and 3% pass the family business onto the older couplefourth generation. And in its report Family and Small Farms USDA predicts that 70 percent of U.S. farmland will change hands in the next 20 years, and that “many family operations do not have a next generation skilled in or willing to continue farming.” Two examples of the trend–from 2002 to 2007, the number of farm operators 75 years old and older was the fastest growing age group while the number of operators under 25 years of age decreased by 30%.

How do we encourage families to plan for the future of their farm?  As mentioned in the first post, it is hard to start the family discussion on farm succession. In the fall of 2012, SMADC sent out a survey to approximately 350 farmers in the region and 158 surveys were returned. Of those returned, only 51 (32%) have a succession plan to eventually transition the ownership to a family member. While most of the Southern Maryland farmers did not have succession plans, 80% wanted to continue to farm the land and keep the farm in agriculture.

eastern shore 001As he proceeded in the discussion, Don made a provocative suggestion: When thinking of farm succession, “let the farm speak loudest.” In other words, ask yourself “What is best for the farm?” This is a question you need to pose to your heirs as well. Without family discussions, it is impossible to know for sure whether or not a child is even interested in farming or whether their spouses would ever consider living on the farm. In addition, you need to ask yourself if the heirs would be up to the task and if they would view farm ownership as an opportunity or a burden.  Don noted that not everyone is a good steward of resources. While some children might be hard workers, they may not be good at managing finances.

Most farmers want their land to continue in farming, no matter who owns it. There are many new farmers who are seeking farmland, and access to land is one of their greatest challenges. Of course, there are only two ways that new farmers can have access to land. One is to have permission to work or lease another person’s farmland. The other is to buy it. Unfortunately, Maryland farmland is worth three times the national average, so it can be difficult for new farmers to purchase.

In the survey, only 4% of the farmers in the Southern Maryland survey were interested in leasing part or all of their farm to a new farmer while making decisions about the future of their land. We need to learn why farmers are reluctant to lease their land to new farmers and figure out ways to address their concerns. In addition, we may need help from land trusts and government agencies which own farmland, to start up new farmer lease programs so that new farmers can build their farming knowledge, their resume, and their farm business plans for eventual land purchase. Fortunately, with Maryland’s land preservation options, farm purchasers can often pay as much for land and those who wish to develop the land.

Meanwhile, families who wish to keep land in farming should start the discussion. There are some great resources such as those presented at the Farm Action Workshop. In addition, there are online resources to get you thinking about succession planning, such as  Planning the Future of Your Farm. It is time to seek out the resources needed to plan for your farm’s future.

 

 

 

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