Don’t Have a Farming Heir?
Don’t have a farming heir but want to find a family to work your land? Here are some tips and strategies for you:
- Start with your local contacts then use land matching sites
- Decide how flexible you are to working with the tenant or buyer on price
- Consider a long-term rental arrangement, option for purchase or contract for deed
If you do not have a farming heir, it may help to know you are not alone. Fully half of Iowa farmers do not have a successor, according to the Iowa Rural Life Poll. 68 percent of Iowa farmers report they have no adult children who currently farm. For those who have no identified successor, 29 percent don’t know what their future plans will be, 20 percent hope to identify successor.
And yet, for many of us, we want to keep rural communities vibrant and there is no better way to do that than to provide land for a family to farm. At the same time, there is a surge of those wanting to farm. Practical Farmers has 1,600 of these beginning farmers in its network alone.
Jim French, a PFI member who farms in Kansas, says that “if a family member wants to continue to farm and meet our conservation goals, then that should happen.” But his two children are lawyers, so that may not happen, so he’d like to use his land to help another family farm. “I am not as concerned if my children don’t want to come back to farm,” Jim says. “I’m reinforcing those values in the community I live in. I hope I can have a community where kids can ride their bikes, enjoy nature, have clean water. That’s our vision for rural America.”
How do you find a successor if you don’t have anyone in mind? There may be someone closer than you think. Call old contacts in town, as Dale Nimrod did when he first decided on a strategy to pay back his community by finding a family to sell his farmland to. Being part of a network, like Practical Farmers or your county Farm Bureau, will introduce you to new farmers more informally. There also are a variety of land linking sites, including Practical Farmers’ FindAFarmer.net site and Ag Link from Iowa’s Beginning Farmer Center (http://www.extension.iastate.edu/bfc/farm) that may help.
According to the organization Land for Good, transferring a farm to a non-family successor is often different in many ways. For example, with a family transfer situation, both parties have likely known each other most of their lives. That isn’t as likely with a non-family successor. Whether you are leasing or selling, Land for Good recommends solid interviewing of the potential new farmers, to get answers on specific questions like work habits, work ethic, integrity, management skills and growing skills. Also, an introductory period to see if the farm “marriage” works out would be helpful. Perhaps even more than with family farmland transfers, formal arrangements, written out in detail, are critical.
States and federal governments have realized that we have a serious need to get beginning farmers on the land, and have responded with a variety of programs. For example, beginning farmer tax credits are available in Iowa and Nebraska to provide farmland owners an incentive for leasing their land to beginning farmers.
If your land is coming out of the Conservation Reserve Program, consider the Transition Incentives Program, whereby a retiring farmer with expiring CRP land may provide a long-term lease or sell to a beginning farmer who commits to conservation improvements. The program gives the retiring farmer two additional years of CRP payments.
Once you find someone for your land, consider a longer-term rental contract. Lack of secure farmland access is a serious problem for today’s beginning farmers. If you want to encourage your family to continue the relationship with the beginning farmer after you are gone, consider a buy-sell agreement, whereby your chosen farmer has the first option to buy. Or consider a contract for sale with the beginning farmer while you are still living.
Neil Hamilton is a farmland owner who is using the contract for sale approach. He grew up on, and then inherited, farmland in southwest Iowa and chose to sell to a beginning farmer on a 15-year land contract with a balloon payment at the end. He believes “Adams County needs young farmers owning a piece of land” more than it needs owners who don’t live in the area. “Historically this nation’s preference was not for tenancy but to convert tenants into owners…. Ownership was the goal for a lot of reasons: For security, for wealth creation and for stewardship. Not many people would choose to always be a tenant if they could own the land.”
There are a variety of partners out there wanting to assist you in helping beginning farmers to succeed, including local banks and the Farm Credit system. The Farm Services Agency offers highly competitive rates for those farming 10 years or less.
An increasing number of outside investors are also working to help those beginners succeed and might be potential partners for you to get a beginning farmer on the land. Iroquois Valley Farms is one of those companies. Anti-corporate farming laws restrict the ability of some farmland investment companies to own land in some states, but not in Illinois, where Scott Friedman has partnered with Iroquois Valley Farms.
“Finding farmland is tough,” Scott says. “In 2001, we lost 150 acres that we had been farming when the acres were sold at auction. That was hard.” Then, in 2006, a nonprofit purchased land for Scott, and then sold it to Iroquois Valley Farms. “Right after that, my second opportunity to work with Iroquois Valley Farms came up on land just two miles from the first farm,” Scott says. “My mom grew up on this farm, and my grandpa, dad and now I have farmed this land for about 75 years. The landowner we knew died, and her three children inherited it. One of them met with my mom, dad and me and said ‘we’re going to sell the farm.’ I thought, ‘shoot, I don’t want to lose those 230 acres.’ But I didn’t have the wherewithal to buy it.” Iroquois Valley Farms stepped in, and purchased the land and once again gave Scott a long-term lease.
Land for Good has a variety of resources for farmland owners without farming heirs: http://landforgood.org/
To find beginning farmers looking for land in Iowa, visit Ag Link: http://www.extension.iastate.edu/bfc/farm and FindAFarmer (findafarmer.net)
To read about farmland owners who have provided land for non-related farmers to farm (including Dale Nimrod and Rob Fleming), visit www.practicalfarmers.org/farm-transfer
Transferring the Farm Series is an excellent overall resource: http://www.cffm.umn.edu/publications/pubs/farmmgttopics/transferringthefarmseries.pdf
Iowa program providing tax credits to landowners who rent to beginning farmers: http://www.iowafinanceauthority.gov
Nebraska program providing tax credits to landowners who rent to beginning farmers: http://www.nextgen.nebraska.gov
Federal financing for those farming 10 years or less: http://www.fsa.usda.gov/programs-and-services/farm-loan-programs/beginning-farmers-and-ranchers-loans/index
Information on program to use CRP land to help beginning farmers: http://sustainableagriculture.net/publications/grassrootsguide/farming-opportunities/crp-transition-option/
Resources for landowners who want to find farmers: http://landforgood.org/who/landowners/
Company that helps young farmers rent or buy farmland: www.iroquoisvalleyfarms.com
Dale Nimrod and how he found a farmer to sell to: https://www.practicalfarmers.org/member-priorities/farm-transfer/
Shivvers sisters, farmland owners, work to transfer their land, “Choose Tenants with Your Values,” https://www.practicalfarmers.org/member-priorities/farm-transfer/
Landowners Rob and Susan Fleming helping farmers access farmland: https://www.practicalfarmers.org/blog/2016/08/01/tribute-landowners-community/
More good profiles on farm transitions: http://landstewardshipproject.org/farmtransitionsprofilesintroduction
Good resource for beginning farmers seeking land:
To network with other beginning farmers: https://www.practicalfarmers.org/member-priorities/beginning-farmers/
A variety of resources for new farmers: https://newfarmers.usda.gov/