Who Will be the Next Generation of Farmers? Farm Link Programs Explored for Lessons Learned
by Mary Fund
Who will be the next generation of farmers? This is a question with many answers. But none of the answers are straightforward, simple or ensured. Traditional farm transitions within families are complex and pose more challenges today than in the past. The high cost of land, the fragility of farm income and the uncertain nature of the farm economy make agriculture a questionable choice, or at least a risky and stressful choice. Fewer farmers have heirs or successors who want or are able to take over the farm. Yet, interest in farming as a career and a way of life remains high.
The average age of farmers nationally and in Kansas is around 60. This means that a large number of farmers will retire in the next ten to twenty years meaning a large amount of land will be transferred to someone.
While transfer to a farming heir is no longer a certain thing, what about farm transitions where there is no successor or family heir? For those who want to see a farm legacy continued, if not a family legacy, is there something other than selling to the highest bidder on the open market? And what about those who are seeking land and want to farm?
A wave of interest from a largely non-farm population inclined to raising food for an emerging local and regional food system via specialty crop or small farms combined with more traditional rural dwellers or displaced farm heirs seeking a way to carve out a niche or entry into farming begs the question: who will farm? And how will they get access to land?
Over the past 20 to 30 years a number of programs arose around the country to help address these questions of linking retiring or outgoing farmers with beginning or new farmers. They are called “land link” or “linking” programs, and provide a range of services from simple listings of farms for sale or those seeking land, to actual matching services or events to bring people together, to business planning and legal advice. Success has been met to varying degrees and depends on what the expectations were.
Kansas dabbled in such a program in the 1990’s immediately after the mid-1980’s farm crisis. This was prior to the internet providing more options for easier, more timely program management. The program had some limited state funding, but did not survive past a couple rounds of budgeting.
Last year, the Kansas Rural Center joined researchers at Indiana University to help explore how land link and matching programs across twelve states in the Midwest and Central Plains have fared. Neither Kansas or Indiana presently have formal programs to assist specifically with transfers between non related parties. But we found 40 some programs (active and inactive) across the twelve states.
We asked the following questions:
* What works and what does not work for programs that assist in some capacity with farm/ranch transfers between unrelated parties?
* What do leaders of these programs, including farmer mentoring programs, view as next steps and best investments in helping farm/ranch owners transition to a non-family successor?
* What could we learn that would help improve existing programs?
* What should anyone (like those of us in Kansas and Indiana) know before starting, or even thinking about starting, such a program?
* And beyond program services to link or match owners and seekers, what are the alternative models or stories of ownership or leasing out there that might help beginners onto the land and help continue farm legacies?
Let me be clear that we set aside the more typically addressed questions and difficulties facing traditional family transfers, such as family communication issues and succession planning. These are complicated enough but Extension programs at land grant universities regularly host educational workshops for these type of transfers.
We focused on land link programs, including a few that include mentoring or internship components, that primarily serve those without family connections or successors.
To date, we have completed the primary research: an online survey of active and ended programs in twelve states in the Midwest and Central Plains. Twenty-nine of 42 contacted programs participated in the survey and a follow up telephone interview. Participating programs were also asked to share a similar survey with their program participants to get a sense of farmer/seeker perception of the services and their needs.
While we are still working on farmer case studies of non-family transfers and compiling information on alternative land ownership models, we can offer the following short summary of the survey findings.
Basic characteristics of reviewed programs. About 80% of the programs are active with a median experience of ten years ranging from one new in 2018 to some that began in 1990. Most of the programs reviewed (63%) were located within non-governmental organizations (NGO’s or non-profits). About 17% were located within an Extension program at a land grant university, and another ten percent within state departments of agriculture. Maintaining funding is a struggle for most of programs, and funding determines staffing and scope.
Two categories of beginning farmers are served by these programs. One set is moving into commodity crop/livestock production; the other is moving into non-commodity crop or value added or specialty crop production. Beginning commodity crop farmers are often from a farm background, but are looking for farming opportunities because their home farms cannot accommodate them.
Other beginners are often from non-farm backgrounds with varying skills and experience, but are also looking for a way to enter farming. Programs reviewed tended to serve one or the other, and sometimes both. Programs provide a range of services with 67% offering some type of linking or matching service. See below for description of services.
Bucket of Services:
Listing: a managed list of available farm/ranch properties; may also list seekers. Can be done with minimal staffing or time.
Linking: a service providing contact information to seekers/owners, typically pre-sorted or pre-screened. A step beyond listing.
Matching: a service that facilitates a specific transaction between seeker and owner.
Tax Credit: for landowners who lease/sell to beginning farmers.
Mentoring: a service that facilitates formal connections between learners (who may be farm or ranch seekers) and mentors who are farm/ranch owners. May be only a learning connection and not a transfer situation.
Support services: general services that build seeker and/or owner competencies to engage in farm/ranch acquisition or transfer. May include: business/financial/acquisition planning, land use planning/ farm/ranch design, estate/succession/transfer.
Ancillary services: not directly related to farm/ranch acquisition or transfer. May include: general business / viability planning, marketing, employment/labor, production systems/practices, non-farm/ranch estate planning, financial management, land use planning/conservation.
Summary of Findings.
Finding each other is the biggest challenge.The number one obstacle to non-family transfer is the basic and obvious problem of owners and seekers finding each other. However, programs also ranked this service as one of the main ways they help people. So even a very basic listing service, such as an online service, which can bring farm/ranch owners and seekers together even with limited staffing, facilitation or follow up, can be beneficial.
Low-input networking events to bring owners and seekers together in either stand-alone events or as part of an annual conference or meeting are also helpful to bring owners and seekers together. On-line discussion forums also allow seekers and owners to build relationships with minimal staff oversight.
There does need to be some kind of staffing and oversight to manage inflow and outflow of information and to keep lists current. Better yet are those programs that have some sort of tracking metrics in place to measure success or identify problems.
Establishing medium-term metrics is critical. If the main measure of success is how many full transfers or matches are accomplished, none of the programs is particularly successful, as this is the hardest and most elusive accomplishment. Measuring progress along the way is critical. It may well be that providing people information or resources that stops them from making a bad decision is as critical as making the perfect match. Follow up is also important as while a full transfer may not have happened the first try, owners and/or seekers may have used lessons learned to make a more successful match later.
Mentoring programs are good for both farmers and seekers. The goal of these programs is often not a farm transfer between the mentor and mentee, but the transfer of skills and knowledge that may help a beginner access land and opportunity down the road. But Program Coordinators noted that mentoring is a very valuable aspect of later career farming/ranching. The mentor role helps to prepare farmers/ranchers for transitioning their operation by formally moving a farmer/rancher into an advisory role. Thus, establishing some type of mentoring program –if carefully planned with clear goals for both mentor and mentee can be very helpful to helping beginners access land and opportunity.
Beginning farmer state tax credits have attracted a lot of participation and have helped beginners gain secure tenure in Iowa and Nebraska. (Minnesota started a program in 2018.) There is also a beginning farmer bond operating in a few of the states we surveyed (does not include Kansas). The federal tax exemption is for interest income earned from owner agreements with qualifying beginning farmers. Both federal and state tax credits aim to support beginning farmers who are from ag backgrounds and are working into becoming an owner. These programs do have some requirements including but not limited to farm financial courses, succession training, and a written legally binding succession plan. Studying the programs in Nebraska and Iowa in detail is the place to start to determine if a similar program would be helpful in other states.
Individual facilitation is helpful but how much a program offers varies—largely due to the amount of time required. Coordinators offered a range of opinions on the value of providing incremental levels of facilitation. Consensus was that owners and seekers can use a lot of assistance in all phases of developing a farm or ranch transfer. But opinions diverged on the payback of additional investments of time assisting individual owner-seeker relationships. Only one program offered a permanent full time staff person to assist with non-family transfers. Some suggest that even a single conversation can provide valuable information. Others argue that facilitation is not a one-time deal and that facilitation is as much about helping develop relationships as it is about providing information. But bringing in experts when needed can be a huge help. An indirect strategy is to educate professionals who advise farm/ranch owners on a regular basis such as lawyers, accountants, tax preparers, lenders, etc. so they understand that there are alternatives to selling on the open market.
Interest in alternative land ownership models is growing. While not directly a part of the survey, we have also tapped into a range of options to traditional buyer-seller relationships. Land trusts, investor groups, community land ownership, self directed IRA’s, and various leasing/selling arrangements offer some creative alternatives that can create a farming opportunity for a beginner and pass along a meaningful legacy for the farm owning family.
Next steps in the project. The above is a nutshell view of the report findings. The final report will be completed later this summer or fall. A draft version can be requested from KRC by contacting Mary Fund at firstname.lastname@example.org or Julia Valliant the primary researcher and author at Indiana University at email@example.com. A final report will be publilshed by Perdue Etension in late summer or early fall.
KRC will also hold a stakeholder meeting in Ks. in the near future to review the research findings and explore interest in some kind of linking service or educational program. A second more public version of this meeting will take place at the fall KRC annual conference along with a couple of additional workshops on farm transitions/beginning farmer issues or alternative models of land ownership. The project is funded by NCR SARE Research and Education Funds.
Contact Mary Fund at firstname.lastname@example.org.