USDA ASSISTANCE
MONETARY AND ADVISORY PROGRAMS
Financial Programs To Help You
Ag Risk Coverage (ARC) and Price Loss Coverage (PLC) Programs By Farm Service Agency (FSA)
ARC and PLC are two programs available to crop farmers that provide financial assistance to farmers in times of low commodity prices and/or decreased production. Farmers must choose a program, file with their local FSA office, meet eligibility requirements, and provide necessary documentation. While established farmers cannot enroll if their share of land is less than 10 acres, BFRs can enroll less than 10 acres.
Agricultural Conservation Easement Program (ACEP)
By Natural Resource Conservation Service
ACEP is available in all states and offers two programs, Wetland Reserve Easement and Agricultural Land Easement (ALE). Each program has its own set of guidelines. ALE helps land stay in its current use. This can help beginning farmers keep their land in agricultural production. Land in this program can be cheaper than regular farmland, allowing beginning farmers more easily access land. ALE requires that the easement is held by an organization or government agency, with NRCS providing funding.
Conservation Loan & Loan Guarantee Program
By Natural Resource Conservation Service
Farmers who have worked with NRCS to develop a conservation plan are eligible to request loan funding for implementing conservation practices. The maximum value of the loan is $1,750,000, and funds are guaranteed by FSA, with FSA administering the program through approved lenders.
Crop Insurance Premium Subsidies
By Risk Management Agency
The government subsidizes crop insurance premiums at varying rates. Beginning farmers may receive an additional 10% subsidy on qualifying insurance policies, including whole farm, multicounty, enterprise, area plan, and area revenue. Basic and optional unit plans do not qualify for the BFR premium subsidy.
Dairy Margin Coverage (DMC) Program
By Farm Service Agency (FSA)
DMC offers dairy farmers a way to manage risk by locking in a margin, based on national milk and feed prices. The program offers payments if margins fall below a certain level. Catastrophic coverage costs a $100 administrative fee and premiums increase as coverage levels increase; however, BFRs may be exempt from Dairy Margin Coverage’s administrative fee.
Direct Farm Ownership Loan
By Farm Service Agency (FSA)
FSA may lend up to $600,000 directly to a farmer to purchase a farm, farm expansion, down payment, easement purchase, building or facilities construction or improvement, soil and water conservation protection projects, and closing costs. This loan may be a participation with another lender to increase the loan value. Applicants must satisfy eligibility requirements, including purchasing and operating an eligible farm enterprise, meeting general requirements, and possessing adequate farm managerial experience. Farm ownership loans have a maximum length of 40 years, and FSA determines rates.
Down Payment Program
By Farm Service Agency (FSA)
This program is only available to BFRs. BFRs with a 5% down payment may fund the remaining 95% of the purchase through FSA and a private lender, for a farm appraised at up to $667,000. FSA will fund up to 45% of the purchase value, at a maximum loan of $300,150, with a term of 20 years and an interest rate of 4% less than the direct farm ownership rate or 1.5%, whichever is larger. Other benefits and stipulations may apply related to terms and guarantees.
Emergency Assistance for Livestock, Honey Bees, and Farm-Raised Fish (ELAP)
By Farm Service Agency (FSA)
ELAP provides funding for losses not covered by other disaster programs, such as LIP or LFP. Losses may include events such as adverse weather, as deemed by the Secretary of Agriculture. Feed transportation due to drought for grazing animals is covered under ELAP. Beginning farmers can receive up to 90% of their lost costs.
Environmental Quality Incentives Program (EQIP)
By Natural Resource Conservation Service
EQIP provides financial and technical assistance to all farmers to implement conservation practices such as cover cropping or grazing. Producers sign a contract agreeing to implement techniques on the farm. Applications are accepted year-round, even if funding is exhausted for the year. Beginning farmers can receive up to 50% advance payments to help cover material and contracting service costs related to EQIP. Additionally, 10% of funds are set aside for socially disadvantaged and beginning farmers, who can receive higher payment rates.
EZ Loan Guarantee
By Farm Service Agency (FSA)
Guaranteed operating or farm ownership loans of up to $100,000 for smaller, underserved, non-traditional, and/or niche operations. These loans have a shorter application process and require less paperwork than traditional guaranteed loans. The funds can be used for various purposes, including machinery, operating needs, farm purchase, expansion, or closing costs. Loan length varies depending on the purpose of the funds, and rates are negotiated with the lender.
Farm Ownership Microloan
By Farm Service Agency (FSA)
Applicants need to have spent three of the last ten years engaged in farming; however, education, management experience, military leadership, or repayment of a youth FSA loan may be substituted for one year of experience. Maximum funding is $50,000, and real estate is used as collateral. Terms vary with a maximum length of 25 years. The interest rate is FSA’s land ownership rate, with no discount.
Guaranteed Farm Ownership Loan
By Farm Service Agency (FSA)
A guaranteed farm ownership loan can total up to $1,825,000, with FSA guaranteeing 90% of the loan to an approved FSA lender. Farm ownership loans may be used for a farm purchase, but can also be used to expand or make improvements to a current farm, cover closing costs, refinance debt, or fund a soil and water conservation project. Applicants must be a family farm and meet FSA’s eligibility requirements.
Guaranteed Operating Loan
By Farm Service Agency (FSA)
A guaranteed operating loan provides up to $1,825,000 in funding to a farmer meeting FSA’s requirements. FSA may guarantee up to 90% of the loan, sometimes 95%, with an approved lender. The loan can be for up to seven years and provides funding for livestock, machinery, and operating purchases. Annual operating loans are expected to be paid down each year upon the sale of the crop.
Haying & Grazing Conservation Reserve Program (CRP) Land By Farm Service Agency (FSA)
BFRs with a contract share greater than zero may use CRP land for non-emergency grazing outside of primary nesting season (PNS). Payment to BFRs will not be reduced.
Land Contract Guarantee
By Farm Service Agency (FSA)
FSA will guarantee land contracts to BFR, which is either a prompt payment or standard guarantee, depending on what the seller selects. A prompt payment guarantee assures three amortized annual installments of the land contract and real estate taxes and insurance. A standard guarantee promises 90% of the land contract’s principal balance, with the seller responsible for finding a third party to service the contract. The purchase price may not exceed $500,000, and other terms and requirements apply to down payments, interest rates, and loan length.
Noninsured Crop Disaster Assistance Program (NAP)
By Farm Service Agency (FSA)
NAP gives financial assistance to farmers who grow non-insurable crops when adverse events, such as a crop loss or prevented planting, occur. Beginning Farmers and Ranchers are eligible for a service fee waiver ($325/crop or $825/producer/county) and a 50% premium reduction.
NRCS Five Step Planning Process
By Natural Resource Conservation Service
NRCS uses a nine-step planning process to help farmers identify the best candidates for their programs. The process begins by meeting with a local NRCS staff member to determine goals and develop a conservation plan (step 1). From there, farmers apply for financial assistance (step 2), and NRCS determines eligibility (step 3) and prioritizes applications (step 4). Finally, the farmer and NRCS sign a contract to implement the project.
Operating Loans
By Farm Service Agency (FSA)
Farm Operating Loans may be used for normal operating expenses, machinery and equipment, minor real estate repairs or improvements, and refinancing debt. The direct loans are available up to a maximum of $400,000. FSA will guarantee farm operating loans through a commercial lender up to $1,776,000. The repayment term may vary, but it cannot exceed seven years. Annual operating loans are generally repaid within 12 months or when the commodities produced are sold. Direct operating loans require applicants to have sufficient education, training, or at least one year’s experience in managing or operating a farm or ranch within the last five years. Farm Service Agency offers BFRs both guaranteed and direct operating loans.
Operating Microloans
By Farm Service Agency (FSA)
Applicants must have farming experience, with apprenticeship and small business experience considered by FSA. The maximum loan is $50,000. The loan is secured by farm property and crops. Operating loans must be repaid within 12 months or when the crops are sold. The interest rate is the FSA operating loan rate, with no discount.
Transition Incentives Program (TIP)
By Farm Service Agency (FSA)
Land may be taken out of CRP up to two years before its expiration if it is being transitioned (sold or long-term lease) to a beginning, veteran, or socially disadvantaged farmer, who is not a family member. Furthermore, the land owner may receive up to two additional CRP payments after the contract’s expiration.
Tree Assistance Program (TAP)
By Farm Service Agency (FSA)
TAP provides help to nurseries and orchards that lose trees and bushes due to a natural disaster. To receive reimbursement, farmers must experience a loss of at least 15% mortality or damage. Beginning farmers receive a higher reimbursement rate, 75% of the cost to replant or rehabilitate established farms. Only trees that produce an annual crop for commercial sale or trees that are sold for commercial purposes (e.g., fruit, nut, ornamental, or Christmas trees) are eligible. Pulp and timber trees are not eligible.
Using Previous Production History for Crop Insurance
By Risk Management Agency
A beginning farmer may use the previous owners’ crop production history, with permission, rather than using the county transitional yield (T-yield), which tends to be lower than average yields. This allows the beginning farmer to insure crops closer to their actual production and insure a more significant percentage of their production. The beginning farmer must have previously grown the crop or been involved in decision-making regarding growing the crop.
Value Added Producer Grants
By United States Department of Agriculture
Agricultural producers wishing to begin processing or marketing new products (e.g. making cheese from milk) can apply for a USDA Value Added Producer grant. Applications are accepted on an annual basis in a national competition. Beginning farmers receive priority. Up to $75,000 is available in matching funds for planning grants and $250,000 in matching funds for working capital grants.
Yield Adjustments for Crop Insurance
By Risk Management Agency
A beginning farmer can use 80% of the county’s transitional yield (T-yield) if his/her crop yields are lower than this average due to a catastrophic event. Typically, a farmer facing a catastrophic event can use only 60% of the county’s T-yield.
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