farm land financing

So I have a question for Elizabeth and Eric and anyone else.

If a young person wants to start a farm, what are the workable options for gaining farm land? Especially options in the spirit of permaculture?

So far the only available option seems to be go into debt. This is the standard advise and the only apparent option. This is Mark Sheppard's advise. But that is neither sustainable nor wise nor compatible with permaculture in my view. So what else is there?

Context:
I speak specifically of the US context and of people wanting to get into direct market farming, as that is where the question most often comes up. I have a lot people who come to me for advise who want to get into farming and can't because they can't get access to land. A lot. And we need a lot of new farmers because our farm population is aging but we can't get these folks into a position with land.

We're not talking 1 acre hobby farms but enough land for an economically sustainable mid-sized farm. 20 to 40? acres fruit and vegies; 80 to 300 acres hogs/dairy; 660?-10,000 acres beef.

Personally I have a little under 80 acres myself and am making it work for hogs and dairy and poultry but the best model for a mid-sized economically sustainable farm has me producing my own hay and grain and I can't do that at this scale. And the equipment needed for what I'm doing would do 100's of acres and so this pushes up my overheads. And my biggest demand is beef, which requires much larger scale to produce economically.

Answers that don't work:

Farm Link: Nice option, but availability is limited to non-existant in many parts of the country.
Debt: Farming and debt don't mix; this is suicide. Land is priced at investment value and the interest cost is higher than the rental value. It can also be hard to get.
Renting: Often impossible to find, insecure, and for many types of enterprise you need to live on the farm or build infrastructure incompatable with rental.
Trusts: Not available most areas.
Just do small scale vegies/SPIN farming: Not everyone can be a vegetable farmer. This is easy to get into and the market being saturated in many parts of the country. People still eat meat and dairy and they're often more in demand.
Crowd funding: Maybe this could work. But how? Has anyone crowdfunded 250k for land? Will this scale if everyone starts doing it?

Hi Jay, there are lots of non-ownership tenure options. I was very lucky but was able to secure 26 acres of prime farmland two miles from downtown from the Sisters of Providence for $1 a year by basically bothering them a lot and finding shared resonance in their mission (it took a few years). Get a soil map or on googlemaps and track down parcels that look promising. I recommend the book Holding Ground: A Guide to Northeast Farmland Tenure and Stewardship, a great resource for tenure options and contracts. A more introductory overview is ATTRA's Finding Land to Farm (https://attra.ncat.org/attra-pub/summaries/summary.php?pub=174). Eric

Great info Eric thanks.

I read somewhere that there is a person or business looking to purchase abandoned land in Detroit to start up farming. I would bet there are at least some cities that would consider selling off vacant land for next to nothing, like $1, to get if off their books and to be able to have to stop maintaining the land and start collecting at least some taxes. As I drive through Detroit every day on the way to work, I see entire blocks adding up to a lot of acres either empty or almost empty with burned out homes. A lot of sweat equity and some time could really clean up these parcels which could be farmed. It could be an option.

Kim, what you're referencing is basically the SPIN method. Urban land is great for vegies but little else. And even then the economics of SPIN is dicey.

Eric,

The northeast is somewhat of an exception to what I spoke of as there are many strong FarmLink programs there and absentee farm owners are more liable to want to see the land preserved through organic farming. However it is not like that in most of the country; especially here in the mid-west.

I have that book already, but thanks for bringing it up as others may be interested. Another useful book is Greg Judy's No Risk ranching. But I can tell you from experience the land patturns in his area of MO are different than in many others and it won't work everywhere.

There are not 'lots of non-ownership tenure options'. I've done what you say and while it can work it usually doesn't. And others I know looking can't find land. To the contrary I knew several farms that closed for lack of land.

Anything workable for farmland is usually already snapped up in long tenure leases. If its not currently being farmed there is usually a really good reason; especially after a decade of record high grain and beef markets. There are some marginal cases where someone maybe able to make something happen but it won't work for most enterprises and it certainly won't put any large number of folks back on farms.

Even if one is able to find a non-ownership option those only work in limited cases where you happen to live near by and don't need any additional infrastructure; which vastly limits the options of what land you can target and what enterprises can be done. Food forests and perennial poly-cultures? Forget it. And you're not likely to be able to source enough land this way to do any kind of larger scale operation.

When I was looking for land originally I found a few rental type arrangements in the bistate area, but none had housing on-site or near by meaning uneconomic amounts of travel would be required. And that doesn't work if you're doing anything other than hay or crops.

Hi Jay, well if you've truly exhausted all those other options then its time to bite the bullet and get a loan or get a high-paying job and save up a lot of $ and buy a farm debt-free after 5-10 years. I know that ain't always easy either. Are there farm management opportunities you might be interested in? These can be a good way to earn money while gaining skills. Eric

Another very juicy -- and challenging, and often controversial -- topic!

To start, it feels important to say that although Jay may have decided that the options he listed are not for him, many in his list have worked, and are still working, for many people. The point that he does make clear, and that I hope everyone will read loud and clear, is that not all options will work for everyone, in every situation. I'm a bit wary of blanket statements that say "this doesn't work" without going into details, because what doesn't work for some might well work for others, in just the same way that what does work for some might not work for others... it all really depends on what you're trying to do, how, why, and with what, right?

As I'll probably say in many different threads in many different ways over the course of this Q&A, my favorite strategy for finding something that will be a good fit for you... whether it's a land agreement, investment dollars, a breed of chickens, a business partner, a life partner, anything... is to do the following:

1. Get REALLY CLEAR on your own values, goals, timeline, constraints, connections, predilections, etc etc etc. Don't skimp on this step! It's the most important one, as you can get very distracted during the next step...
2. Do your research and find out what is actually available where you are, or at least applicable.
3. Narrow down your list of options and ask anyone who will talk to you what their experience has been with those options.
4. Talk to the people you'd be partnering with. See if you "click." Listen closely to what they are saying their values and needs are.
5. Negotiate an agreement that comes as close as possible to meeting everyone's needs.
6. Honor the agreement. If something's not working, talk about it, and renegotiate.

Often, as Jay points out, there just isn't a good match. Which is a bummer, particularly as this issue of getting onto land is, as he also points out, a huge crux in the sustainable food movement in general, particularly in the Ag of the Middle zone where you're bigger than a market garden but don't want to be beholden to market fluctuations in price / lack of brand loyalty / etc etc inherent in trying to sell to an undifferentiated commodity market.

SO... where else to go for resources and advice? Here are some amazing organizations who are making it their mission to address these issues (in the US):

The Agrarian Trust, here's a glimpse of what they're up to:
--Create and promote regionally-appropriate models that conserve productive farmland dedicated to sustainable agriculture, and make the land available to next-generation producers.
--Expand and enhance the financial, legal, and technical assistance networks that are central to the political and economic success of the next generation of American agrarians;
--Facilitate and develop the social and intellectual networks required to overcome the present cultural economy of industrial agriculture.
--Replicate successful models, scale up the rate of farmland succession.

On the homepage of their Resource Library, CA Farmlink has some really helpful Fact Sheets that break down some of the most common lease models that they've seen work, each including Benefits, Considerations, and tips for Preparing to do each of the following:
--Cash Lease
--Cash Lease from Government and Non-Profit Organization
--Crop Share Lease
--Ground Lease
--Lease-to-own

They also recently released a new version of a publication that covers a whole bunch of other ways for farmers (beginning and/or established to get on land, but I can't find it... I will make a phone call to see if/how it is currently available.

Equity Trust is another organization that has done some really innovative work around getting farmers on land. Yes it's true, easements are not always available, and their work shows that they can be very helpful in keeping farmland affordable for farming! The link above will take you to their Resources for Farmers, which include model documents and several publications on the topics of this thread.

Hope these help!

-Elizabeth

***

P.S. An aside re Detroit's urban ag situation, since Kim brought it up: there is enormous controversy surrounding what's happening there, from a social justice perspective... here's a video on the subject featuring my fellow Food & Community Fellow Malik Yakiniof Detroit Black Food Security Network: Future Cities video. And a 2012 Huffington Post article from Eric Holt Gimenez,
Executive Director, Food First/Institute for Food and Development Policy.

Elizabeth, please do let us know if you find that publication.

In the mean time let me see if I can restate this a little more clearly.

This isn't exactly about me. This is more about all the new and potential farmers I mentor for whom a lack of land is keeping them from getting into farming or from farming sustainably.

Yes those options work for many people. But they do not work for most people or most production types nor are they sufficient to get the mass numbers of new farmers on the land that we need to.

We need fundamentally better approaches and clearer paths for transitioning farms to the next generation.

So can permaculture design a better solution?

Get a high paying job and save up money to buy a farm? In this economy? Young people? That's ludicrous. Especially for anything larger than a small vegetable farm.

Are mortgages and debt consistent with permaculture principles? Arn't we supposed to be finding solutions to replace our unsustainable fiat debt based currency system that transfers wealth from the poor and middle class to the bankers?

So can permaculture design a better solution?

One of the common visions of permaculturists is to see mass amounts of land transformed from industrial extractive unsustainable agriculture to permaculture. With the local food movement and the increasingly aging farm population a once in a lifetime opportunity is coming to effect broadscale change nationwide. In fact given the soil degradation timelines this may be our last opportunity.

But only if we can find a way to get mass numbers of young and beginning farmers on the land. And I don't see that happening.

Does permaculture have a way?

Farm Link is one of the really good solutions but it is often severely hampered. One of the problems it has is its business model is unsustainable. Most if not all of those organizations rely on grants to work. And so many don't do much work. Some states have good programs, but many states have no program or programs with few to no land opportunities.

Can permaculture design a better Farm Link?

Ah, OK, I have a clearer sense of where you're coming from now... and I'm completely unqualified to answer what permaculture can do, as I don't claim to speak for them.

Have you been following this thread, Starting from Absolute Zero? Yes, getting onto farmland is important... and yes, owning farmland has its advantages. But if we agree that this is difficult-to-the-point-of-impossible in so many situations... then what?

I'm certainly not attempting to minimize the issue, and the organizations I listed (particularly Agrarian Trust) have far better-developed analyses of the problems and potential solutions than I do!

These are great questions, no doubt about that, and the moment is critical given the enormous amount of farmland that is about to change hands merely by fact of the aging ownership. I look forward to hearing what permaculture would offer by way of design responses to all of this.

Elizabeth

There are some high or at least decent paying jobs for young people including in permaculture. Twenty years ago there were really no such jobs in permaculture but today I know a number of well-paid permaculture site managers and so on. This is a very exciting development.

As to the larger question of developing a new system to get young farmers on the land, that's currently a national conversation here in the US being spearheaded by folks in the Farm Link world, Land for Good, and other organizations and movements. Probably the first place for permies to start is to get plugged in to that conversation about grassroots efforts, alternative financing, and policy change.

Regarding that CA Farmlink document: unfortunately they are still in the midst of updating it (apologies, I had previously believed that the update had been completed), so there's no way currently to get your hands on it... but it should be available in the next few months.

I just spoke with Ali at CA Farmlink and she says you can contact her (ali@cafarmlink.org) for more information about when the new-and-improved version will be out, and how to get a copy.

-Elizabeth

Permies land trust? Permaculture land trust?
What if we look at money ( for buying land) like we look at water on the land and try to slow it down and soak in...I don't know what that would mean...but I'm one of those referred to by Jay, ie itching to get on a piece of land and create food abundance but struggling to afford land (and building loan) and I'm not so young even...the idea of borrowing from a bank is so contraindicated!
I'm really attracted to cheap land usually dry and remote but certainly workable with appropriate water harvesting but my partners job is here and so we're stuck with expensive real estate...
What if successful permaculturalists pooled their deep pockets and started a focused credit union?
Or just wait for the inevitable collapse and make the best of this apartment...sigh