- Young farmers face finance challenge
- Government programs available
- Family may assist
U.S. agriculture needs an injection of youth, says a Texas agricultural lender.
Matt Bathe, President, Capital Farm Credit, Bryan, Texas, says the typical farmer is older and the future depends on “young, bright, high quality farmers,” coming into the industry.”
Moving the next generation onto the farm may not be easy, however.
“The older group needs to be supportive and positive,” Bathe said during the recent Texas Plant Protection Association annual conference in College Station.
In some cases, parents or grandparents may have to assist novice farmers to get necessary financing to start on their own. “For a young, beginning, small farmer to get started is often a challenge,” Bathe said. Often, if a parent or grandparent can’t help, private lenders can’t afford the risk of financing young farmers who have no land, no equipment and no collateral.
“Young farmers typically have no assets and many may have student loans of $50,000 or more. They get started by leasing land and they typically have no equipment.
“A family member who can help a young farmer qualify improves our comfort level,” Bathe said. “Bankers judge risk. Without collateral, a new operation is too risky.”
For those who have no family backing, other options may be available.
“USDA programs may help get these young farmers started,” he said. “We can help them find available programs.”
He said many newcomers find it easier to get into ranching than into row crop agriculture. “They can get started a little cheaper,” he said.
Bathe said farm lending is on a firmer foundation than was the case just two years ago. “In 2008 we were alarmingly close to seizing up,” he said. “We had a lot of uncertainty. We still see some of that but it’s better. Overall, we now have a reliable source of funding.”
Bathe said interest rates for the next year likely will remain flat. “Cost of funds will be relatively low. I hope it continues.”