Beginning Farmer Center: FarmOn Program Westminster Fellowship Club Des Moines, IA Michael Duffy, Director October 27, 2009

Outline Background and current situation Beginning Farmer Center FarmOn program Future Discussion

Summary We have a situation –Decreasing number of farms –Increasing average age and age distribution –Increasing age of land owners –Changing structure of agriculture –Technology that increases continually tightens profit margins All of this makes it difficult for the beginning farmer

Beginning Farmer Center Started in 1994 by the Iowa Legislature Primary objectives are: –Coordinate education programs and services for beginning farmers –Assess the needs for beginning and retiring farmers to identify opportunities for programs and services –Develop statewide programs to educate beginning and retiring farmers

Beginning Farmer Center FarmOn program AgLink program Individual consultations Seminars and other educational programs Some research

FarmOn Addresses fundamental problems of those entering or exiting farming 1.Identifying viable entry opportunities. 2.Developing effective entry/exit strategies. 3.Minimizes the need for entry capital. 4.Developing the required skills.

FarmOn Program: Data base of retiring farmers and young people wanting to farm and a system to match up one with the other 380 young people; 16 retiring couples Educational programs for successful transitions Family mediation Support services such as retirement and estate planning. Financial analysis

Candidates A beginning farmer is someone who… –Wants to find a way to pursue or continue a farming career –Is willing to invest time, energy, resources, and sweat equity in return for an opportunity –Has a strong desire to farm but has limited resources –Wants to avoid large debt needed for start-up costs –Acceptable to a mentoring scenario

Retiring Farmers Plans to retire within 5-10 years Wants to find someone to continue the farm business Wants to help a young person enter into a great career

Retiring Farmers Wants to help preserve the family farm business and the local communities by encouraging young people to move into farming Would like to take maximum advantage of tax savings, such as reduced capital gains in transferring land, livestock, or machinery using income tax credits, and tax-free interest loan programs

Barriers to Exiting the Family Business Children do not want the business or want to sell the assets. No examples within the community. Lack of resource guides. Poor human interaction skills. Poor interactions between the generations. Not aware of entrants who want to own a small business. Desire to equalize estate shares among all the heirs. Don’t know how to transfer the business to the next generation.

Beginning Farmer Center Instrumental in starting the International Farm Transition Network Currently there are 20 states and 15 countries that have worked with the network

Thank you for your interest and support! Contact info: Beginning Farmer Center BFC.1999