Start a Farm With Government Grant Money

July 18, 2022

If you’re thinking about starting a farm, you’re not alone, but you are unique. That’s because less than two percent of all Americans work in agriculture today. Your decision to start a farm is celebrated by our team here at FarmRaise. You’re joining a community of individuals that provide the resources that fuel society and steward our natural resources daily.

This actionable guide will walk you through how to leverage government funding to start a farm. Learn how to qualify for farm financing, navigate grants for farmers and secure the support you need to be successful in getting your farm going.

SEE IF YOU'RE ELIGIBLE FOR FARM GRANTS AND LOANS

Start by Gaining Experience

Your first step in starting your farm is to ensure you have the right experience to qualify for farm financing. It’ll be difficult to start your operation without some kind of financial assistance. Farming is an asset-heavy endeavor: you must buy or lease land, equipment, infrastructure, buildings and seed or livestock in order to begin producing. And more often than not, that financing has to come from an outside source.

So before you consider capital, you’ll want to start your farming or ranching journey by getting at least one year of solid farm management experience on another farm. The more years of experience you can get before you need to invest in your own operation, the better. Aim for at least one, if not three, years of farming experience before you start building your own operation. 

💡Tip to remember: Most USDA grants and loans require that farmers have between one to three years of farm experience to qualify.

Another benefit to building your experience is that you’ll likely cultivate a strong farming network and mentorship. These elements can support you down the line when you’re managing your own farm or search for capital. Farm mentors can even help you secure government funding, too!

Find a farm in your local community and ask about opportunities to work for their operation.

The FarmRaise team visited Smooth Alpaca Ranch in Morrison, Colorado and learned how Rancher Joseph started his alpaca operation.

Choosing the Right Farm

Once you’ve got some experience under your belt, you’ll start getting an idea about which types of farms or ranches are best suited for your skills and resources. Here are some tips to make that decision easier:

Stay true to your environment: 

If you live in a drought-heavy area it’s best to consider drought-resistant crops like lavender or maize. Planting crops outside of their plant hardiness zones will cost you a lot more in the long run. 

Be kind to your neighbors:

The crux of capitalism is competition. But if your farmland is located only a few miles from an alpaca ranch, think twice about starting an alpaca ranch. Instead, think about how your farm might complement the operations around you. If you start a broccoli farm, you can offer the stalks to your neighbors at the alpaca ranch. After all, farming is about community and you’ll find that you rely on your neighbors for tips and information. 

Keep funding in mind: 

When it comes to funding your new farm, we recommend you start with projects that tend to be attractive options for agricultural grant programs and lenders. It may be harder to get funding for industrial hemp than for corn, soybeans and certain types of specialty crops.

Organic and regenerative farming are attractive endeavors for USDA grants, and they often require more time and effort so you'll want to weigh the pros and cons. At FarmRaise, we specialize in applying you to programs like EQIP which help producers use sustainable practices for their operations.

Build Your Business Plan

While you’re gaining experience, create some time to plan for your own farm or ranch. This plan will ground your vision and help you communicate your goals to others. Business plans are living documents that communicate your farm plans to stakeholders like partners, future employees and lenders. 

A strong business plan will include:

Your goals and vision:

  • What will your farm look like after 5 years?
  • What values will the business be built upon?

An overview of your business: 

  • Location, size (acreage)
  • Facilities and infrastructure
  • Operational overview (crops or livestock produced)
  • Marketing overview (how do you market and sell products)
  • Revenue-generating activities including non-agricultural goods or services you plan to offer (HipCamp, hunting leases, events, educational opportunities)

Historical financial performance:

  • How has the farm performed financially in the past (if you have the data)

Financial projections:

  • Expenses
  • Income
  • Prices of goods you’ll sell
  • Projected units sold

Financing plan:

  • How are you going to capitalize and finance the business?

Team:

  • List your team members' experience, roles and responsibilities.

You can create a business plan on your own using tools like Word, Powerpoint, Google Suite or other document creation software. If you’d prefer to use a business planning tool, the University of Minnesota offers a free Business Planning tool called AgPlan.

You can also reach out to our team to ask for business planning guidance.

Secure Your Critical Asset: Land

With farm experience and a solid business plan, you’re ready to start your farm. Now, you’ll need to secure some land - either through a lease or land ownership agreement - to begin your farming activities.

Ask yourself the question: Do I need to own the land, or can I get started by just leasing the land for a few years?

 Most farmers want to own land right off the bat, but the journey towards land ownership can be long and expensive. If you’re able to secure a multi-season lease on land with a reputable land owner, you’ll save yourself some initial financing burden. Leasing land allows you to focus your financing on critical operational expenses (such as rent, fuel, seeds or livestock, labor, equipment and infrastructure). 

Where To Look for Farmland

Here are some marketplaces for renting and buying land to start your search:

If you need financing for your first farm lease or mortgage, you can apply for loans through the government or through private lenders. We recommend starting with:

If you have questions about any of the above lending opportunities, reach out to our team. We can help you understand program eligibility, interest rates, loan terms, and who to contact in your local area. 

Veteran farmers - those that recently retired from military service - are candidates for Veterans Association loans, too.

Register Your Farm With the Local USDA Office

When you secure your land, you’ll want to make sure that you’re registered with the USDA in your county. 

For leased land, your landowner is likely registered already. If they are registered, you’ll want to make sure that you’re listed as an operator on the land. That way you can apply directly for farm operating funding like microloans and USDA grants and cost-share. The landowner can manage this for you, or you can do so directly. 

For owned land, you’ll want to work with the USDA directly to set up your farm registration.

To learn the details about farm numbers, farm records and how to register with the USDA, we’ve got you covered: What Is a Farm Number? Why Is It So Important for USDA Funding?

FarmRaise offers support in setting up your farm records and getting a farm number. Don’t go it alone - let us manage the paperwork for you and prepare you for success as you start your relationship with the USDA! 

Find and Apply for Funding Programs for Your Farm

Once you have land and some initial crop or livestock production, it’s time to start thinking about future grant funding opportunities, because who doesn’t love the idea of free money for farming?

Grants are somewhat confusing to navigate on your own, which is why we’ve created an eligibility quiz so you can discover your farm’s eligibility for federal funding. We’ve also created the nation’s top up-to-date funding library of farm grants and loans for you to see details about funding opportunities nationally and in your locality. 

If you’re ready to apply for programs, we recommend the following resources:

Starting a farm is an exciting and commendable endeavor. We hope this guide is helpful to you as you pursue your goals. 

Keep these tips in mind:

  • Aim for one to three years of farm experience before you apply for farm loans
  • Build a robust plan for your farm or ranch business to help ground your vision and communicate your goals effectively to funders and partners
  • Apply for grants when you’re ready and competitive, which is usually when you have land in production and some initial sales
  • Leverage partners like FarmRaise to save time navigating farm finance

Related posts you might like

Take the free Eligibility Quiz
get started