The USDA Farm Service Agency (FSA) Farm Loan Programs provide direct and guaranteed loans to farmers and ranchers for operating expenses and land purchases. FSA defines a beginning farmer as a producer who:
- Has not operated a farm or ranch for more than 10 years;
- Does not own a farm or ranch greater than 30 percent of the median size farm in the county; and
- Substantially participates in the operation.
State finance programs provide low interest loans, loan guarantees, loan participation programs and sometimes small grants to help producers buy land, buildings, equipment, breeding livestock, etc. Some programs are targeted specifically to beginning farmers. "Aggie Bond" programs, which encourage commercial lenders to offer below market rate loans to qualified beginners in exchange for tax-exempt interest income, are the most common. Programs are often administered by state finance authorities and may not be promoted by state departments of agriculture. The National Council of State Agricultural Finance Programs tracks available programs and produces a comprehensive directory of state-level programs available to beginning and established producers.
Farm Credit is a nationwide network of borrower-owned lending institutions and specialized service organizations that provide loans, leases and related services to farmers and ranchers. Farm Credit offers several programs to help beginning farmers. To locate a Farm Credit institution near you, visit the Farm Credit network homepage.