Beginning Farmer Focus: the Benefits of Individual Development Accounts

From The Michael Fields Agricultural Institute (WI):

Todd and Lily Lanis are first-generation farmers working hard to realize their dream of farming full-time. They plan to someday control 80-200 acres of pastureland, and are working to acquire cattle and a lease on land with on-farm dairy infrastructure.   Faced with high start-up costs, Todd and Lily have had to think creatively, and admit that their goals will take many years to reach. Todd will soon graduate from the Wisconsin School for Beginning Dairy Farmers Farm and Industry Short Course at the University of Wisconsin-Madison, and he emphasizes the importance of continued education for all beginning farmers: “The more that can be learned, the better off we will be to start up,” he says.   Despite their hard work, Todd and Lily face the difficulty of obtaining a loan with limited experience and few savings. “We have drained our savings just supporting ourselves and schooling, just to gain the knowledge and experience we need to start farming on our own,” Todd says. “We have excellent credit and some equity in a home, but I’m sure that we’ll face serious opposition for a loan, even if it is just for cattle.”  How do we grow the next generation of farmers? To help meet the needs of beginning farmers, MFAI and other advocacy organizations successfully got the Beginning Farmer and Rancher Individual Development Account (IDA) Program authorized in the 2008 Farm Bill. The IDA Program was designed to help beginning farmers and ranchers of limited-means build the capital necessary to expand their agricultural businesses through matched savings accounts. However, the program has yet to receive appropriations; MFAI and others within the National Sustainable Agriculture Coalition seek $5 million for the program for Fiscal Year 2011.  Todd thinks that an IDA program is a great self-help incentive for farmers to establish a pattern of savings. “I certainly like the idea that we have to be proactive and that the money contributed by the program would be determined by the amount that we contribute,” he notes. “This makes it less of a handout and teaches proper planning and saving practices.”

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