How To Get A Grant To Start A Farm?

While sitting in our dull and boring 9 to 5 jobs, many of us ache for a better life, one connected to the land. We daydream about living on our own farm and raising animals or growing crops. For most, all it will ever be is a fantasy. But, with a little help, it could become a reality. In this article, we’ll be looking at how to get a grant to start a farm and other ways to get your hands on that dream.

How Can I Buy a Farm With No Money?

It is possible to get a farm loan that doesn’t require a down payment. The Farm Service Agency (FSA) offers a Direct Farm Ownership Loan to new farmers.

You don’t have to have any previous experience in farming or capital to put down. The money provided can be used in various ways, including:

• Buying a farm
• Expanding a farm
• Making improvements to a farm
• Using as a down payment or to cover the closing costs for a farm loan

Maximum Amount – For new farmers, the highest loan amount you can get is $300,000. Interest rates can be seen on the FSA website. See the link above for more details.

Duration – You can repay the money over a total period of 40 years but can also opt to pay it off more quickly if preferred.

Eligibility – To qualify, you’ll need to fulfill specific criteria:

• You must be a United States citizen
• You cannot have any federal loan defaults
• You must have a good credit rating
• You can’t have state or federal convictions
• You must be unable to get any other type of finance to fund your farm
• You must have proof of training or experience to show you can run a farm successfully
• The property you’re buying must be a farm, so a house with a large garden won’t cut it

Do Farmers Get a Grant?

It is possible to get a grant to help you start a farm if you fulfill specific criteria. Grants are often limited to a small number of applicants and for lesser amounts of money than loans.

However, they do have one enormous advantage, you won’t need to worry about paying them off! 

These are some of the grants which may be available to you:

Beginner Farmer

For those new to farming, you can find help not only to start your farm but to get training and technical assistance through something called “The Beginning Farmer and Rancher Development Program.”

Part of the USDA is The National Institute of Food and Agriculture. It gives grants to pay for various activities and funding ranges from $50,000 to $750,000.

Young Farmers

For beginner farmers aged between 18 to 40, there is a $5,000 grant made to 50 of the most eligible applicants each year. Applications close each year at the beginning of January.

This is offered by the National Young Farmers Coalition and is called the Young Farmer Grant Program. It can be used to cover operating costs, to buy feed, livestock, or other expenses.

This video is by the Farm Animal Concerns Trust (FACT) and gives a comprehensive guide on how to get a grant to start a farm.

https://www.youtube.com/watch?v=osrP0IdGEnc

How Do You Get Funding For a Small Farm?

You’re excited about realizing your long-held dream and finally being able to run your own farm. You’ve got a great idea or passion you’re sure will work, and now all you need is the funding. But how do you go about getting funding for a small farm?

The first thing you need to do is start researching the viability of your project to ensure it is financially sustainable and worth someone investing money.

1. Be realistic about the costs involved. Buying a farm is just the start, after that, you’ll need to equip it, buy animals, feed, seed, tools, maintain the land, repair buildings and fences, then there’s the cost of hiring help. 

2. The money you make needs to support not only the running cost of your farm but your personal day-to-day living expenses too. Think carefully about how you’ll earn the income you need and be honest. 

3. When choosing your land and the neighborhood, be selective about where you decide to buy. It has to suit the type of farming you’re interested in doing.

For example, a free-range chicken farm can be noisier than you’d think and the smell made by the chickens, although perhaps not offensive to you, may not go down too well with close neighbors! 

4. Try to think outside of the box. Buying land isn’t always straightforward, and you may not be able to find your ideal. Sometimes small compromises need to be made, or you’ll have to revise your original plan.

If you need help with financing your project, be sure to look for the best deals that offer packages that suit your situation. Shop around for the best rates and ask others if they know of any good deals. Social media groups can be useful for this.

Once you’re confident your project is as great as you thought it was, then it’s time to make a detailed plan. Without a business plan, any funding you apply for will more than likely be rejected.

Writing a business plan will help you to calculate the amount of funding you need for your small farm. It’s always better to over, rather than underinflate these figures. That way you’ll give yourself an added safety net.

Having written a bulletproof business plan, you’ll next need to decide if you’re going to try and get a grant, take out a loan or do both.

For a loan, your first port of call will usually be your local bank, as you’ll probably already have a relationship with them. There are, however, specialist banks and organizations to help in this area.

You can get specialized agricultural loans or find finance companies that offer land and equipment loans. Other options are lending co-ops set up by farmers for farmers and so on. Examples include:

Farm Credit Services of America (ACA) – They offer a wide variety of loans including real estate loans, intermediate-term loans, facility loans, equipment financing, credit lines, and leases.

Rabo Agrifinance / Rabo Bank NA – Provide options such as real estate loans, rising star loans, operating loans, and equipment finance.

Farm Credit Mid America (ACA) – This company offers agricultural real estate loans, operating loans, short-term loans, business loans, leasing, equipment financing, and farm cash management.

Compeer Financial (ACA) – Is a farm credit cooperative owned by its members. It supports agriculture and rural communities. It provides farmland loans, operating loans, starter loans, equipment and facility loans, organic bridge loans, livestock loans, and recreational land loans, as well as lots of advice.

Farm Credit System (FCS) – With 71 customer-governed independent farm credit institutions, the FCS support over 500,000 farmers and other rural businesses.  

How Do I Get a Government Grant or Loan For Farming?

There are various government grants and loans available to those who fulfill the necessary criteria, which vary with each grant. These include:

Specialty Crop Block Grant Program (SCBGP) – This program is designed to help increase the competitiveness of specialty crops. These include activities such as horticulture, nursery crops, fruits, vegetables, dried fruits, or tree nuts.

Beginning Farmers and Ranchers Loans – Although these are loans instead of grants, they are designed with the new farmer in mind.

There are various types of loans available such as the Farm Ownership loan, the Guaranteed loan, the Operating loan, and Microloan.

Rural Development Grants and Loans – There is an extensive list of different activities for which grants are available. It could be that your farm may be eligible for one or more of them.

Farmers Market Promotion Program – This program is aimed to help fund projects that expand direct producer to consumer sales. It gives better access to locally and regionally grown produce.

It supports roadside stands, farmers’ markets, agritourism, community agriculture programs, online sales, and any other direct producer to consumer/retail/restaurant/institution sales.

Participants are required to match the funding they are given with either 10% or 25% of their own money.

Farm Loan Program – This is aimed at small farmers who cannot get a loan or other credit from a bank or the Farm Credit System Institution.

The loans are available to buy land, equipment, livestock, seed, feed, or supplies and for making improvements to the farm or erecting new buildings.

For advice on all help available in your area, you can contact the U.S. Department of Agriculture (USDA) in your state.

Frequently Asked Questions

What Is a Farm Grant?

A farm grant is a sum of money you may be awarded to help you start your farm. These sums of money differ from loans in that you don’t have to pay them back.

Various organizations, from local schools and nonprofits to the USDA, offer grants to help aspiring farmers get started. While the amounts awarded vary, grants typically provide significant funds to cover some or all of the startup costs associated with farming.

Are Farm Grants a Good Idea?

Applying for farm grants is generally a good idea because they provide free funding that can help you turn your dream into reality. Plus, since they don’t accrue interest or require repayment, applying for grants is generally a better idea than applying for loans.

That said, it can take a lot of time to find and apply for farm loans that you qualify for. There is also a lot of competition; you may not receive every grant you apply for. With this in mind, it’s important to weigh the potential benefits of winning each grant against the investment of time you put into it. This will help you determine whether applying for these grants is a good idea for you.  

Can You Get a Business Grant for Farming?

While it is possible to get farm-specific grants, you may also be able to find some business grants that can be used for starting many different kinds of businesses. You can use the funds from these grants to start your farm.

These types of business grants are often available from nonprofits organizations and businesses. Check locally with these organizations to find out if any business grants for farming are available in your area. 

What Are Some Other Types of Funding for Starting a Farm?

Some farmers start their farm without any outside funding. However, for larger or more expensive farming operations, it may be necessary to secure funds from other sources. The most common types of funding for farms are grants and loans.

Grants, as noted, do not have to be paid back. Loans are less competitive and easier to get, but they must be repaid and typically acquire interest until they have been paid off. For those hoping to start their farm without grants or loans, consider starting a crowdfunding campaign through a platform like Kickstarter or GoFundMe.

How Can You Get a Farm Loan?

The USDA offers a variety of different farm loans for different types of farming operations. Types of loans include operating loans, microloans, and farm ownership loans.

To get one of these loans, you’ll need to first fill out an application. You can apply for a farm loan by getting in touch with your local USDA Service Center.

Conclusion

Whether you’re completely new to farming, or an old hand ready to start their own venture, there’s sure to be a funding solution that fits your needs.

Whatever type of farm you want to start, you’ll need to prepare a comprehensive business plan to get a grant or loan.

The information supplied here is only designed to act as a basic guide. It is in no way intended to be a comprehensive list or resource for finding all the available grants or loans that could be available to you.

You may also find other articles on our website helpful if you’re planning to start your own farm or an organic farm.