It never has been easy to start a farm. Even those who were bequeathed a fully operational and successful farm had to know what they were doing, where to find the resources, which markets to pursue, etc. to survive the first few years of farm ownership. Today, many people are drawn to the farming profession out of a passion to grow things or a desire to escape the corporate world. And they are determined to do so, even if they didn’t grow up on a farm or inherit land.
I addressed the challenges of land leasing in a recent post, so today I will focus on the challenges of land purchases for beginning farmers who did not inherit land.
As of 2011, farmland in Maryland was valued at three times the average price of land in
the nation according to the USDA. Maryland is part of a region where there is great competition for farmland, including residential development and commercial development. Even in ‘agricultural’ zoned areas, most counties still allow non-agricultural uses such as golf courses and parks, mega-churches, landfills, private residential estates, etc. In addition, open space purchased by governments to meet Bay water quality standards is often planted into forests and no longer usable for farming other than for timber production.
Size matters when it comes to land values. There is an inverse ratio between acreage and land value per acre. While there is a wide variation in land values per region, larger farms (300 acres +) tend to be worth $5,000 to $10,000 per acre, while small farms (<50 acres) tend to be worth $10,000 to $30,000+ per acre. Beginning farmers cannot benefit from the lower cost per acre of the larger tracts. The smaller tracts require annual mortgage payments of $15,000+ not counting the cost for buying an existing house or building a new one. Most beginning farmers make little or no profit the first few years and certainly cannot cover that type of mortgage expense.
Finally, there can be many hidden pitfalls when either leasing or purchasing a farm. For example, are the soils really suited to the type of operation that a new or beginning farmer wishes to pursue? Do county zoning regulations permit the type of farm operation? What about value-added sales of farm products or agri-tourism? And are there covenants, easements, or notes on recorded plats that limit the type of farm operation?
If beginning farmers are seeking to purchase land to start their enterprise, then they will need a great deal of help for the reasons described above. To be seriously considered for a loan, a beginning farmer will need experience as a farm operator for a farm owner and business plan and resume. However, it is difficult to prove to lending organizations that a farm enterprise is viable and able to pay a mortgage unless the beginning farmer comes with strong financial resources or a good off-farm job.
SMADC is working with its partners in the Maryland Beginning Farmer Success Program to address all these issues. The goal is for beginning farmers to see a clear path to getting access to land. We propose to do this by:
- Increasing the number of postings of farms for sale on Maryland FarmLINK by working more with landowners and the real estate community
- Increasing posting of properties for lease by working with Extension, Soil Conservation Districts and the Maryland Farm Bureau to encourage farmers to post properties for lease
- Identifying potential incubator farms and working with governments or nonprofits to manage them as places where beginning farmers can learn their trade.
Much is at stake. Today in the U.S., there are six times as many farmers 65 years and older than those 34 years or younger. We are losing experienced farmers at a time when the demand for locally-sourced food is on the increase. Add to that the fears of food insecurity and of global food shortages as the world population increases and arable soils are decreasing.
It is time to combat this loss of farmers by smoothing the path to farm leasing or ownership.