What is in this article?:
- Beginning Farmer Land Contract Program Launches
- Land Contract Program
Land Contract Program
Two primary barriers for beginning farmers and ranchers are access to land and capital with which to begin farming. This program, initially launched in 2002 as a pilot program in nine states, is intended to help. It reduces the financial risk for retiring farmers who sell their farmland to a beginning or socially disadvantaged farmer or rancher by providing a federal guarantee of three years of “prompt payments” in case the beginning farmer runs into trouble making their payments.
There is also a second option of a standard 90% guarantee of the outstanding principal on the land contract. The retiring farmer has the option of choosing the prompt payment guarantee or the regular guarantee on the value of the asset.
In order to be eligible for this program, the seller needs to self-finance the sale of their land, and sell to either a beginning or socially disadvantaged farmer. The buyer of the farm or ranch must a) be a beginning or socially disadvantaged farmer or rancher, b) be not larger than a family farm (in which most of the management and labor is provided by family members), c) be the owner or operator of the farm when the contract is complete and d) have an acceptable credit history and be unable to obtain sufficient credit elsewhere.
Interested parties should contact theirlocal FSA office.