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Starting your own farm business offers rewards that range from being your own boss, to working at something you enjoy, to earning income for yourself. A successful farm operation requires careful planning and decision-making, and most importantly, a sound business plan to guide you through the initial start-up years. This guide contains information about issues to consider before starting a farming operation with links to full-text guides on how to start a farm business, and develop business and marketing plans. It also contains information about funding sources for beginning farmers, training, technical assistance contacts, organizations with resources and programs for beginning and experienced farmers, and more.
You may also consult a related Rural Information Center resource, Starting a Small Business, http://www.nal.usda.gov/ric/ricpubs/small_business.htm
This resource guide was revised by Patricia LaCaille John, September 2005; Last modified: Feb. 2009
1. Agribusiness Planning: Providing Direction for Agricultural Firms. Jeffrey Hyde, Sarah Roch. UA371. University Park: Penn State University Cooperative Extension, 2002. 12 p. http://pubs.cas.psu.edu/freepubs/pdfs/ua371.pdf
2. Business Plan Preparation: Tools for Writing Business Plans. Stephen Lawrence, Frank Moyes. Boulder, CO: University of Colorado Leeds School of Business. http://leeds-faculty.colorado.edu/moyes/bplan/
3. Farm Business Plan Worksheet: Balance Sheet. FAS2037. Washington, DC: U.S. Department of Agriculture, Farm Service Agency, 2005. 4 p. http://forms.sc.egov.usda.gov/efcommon/eFileServices/Forms/FSA2037_050118V01.pdf
4. Farm Business Plan Worksheet: Projected/Actual Income and Expense. FSA2038. Washington, DC: U.S. Department of Agriculture, Farm Service Agency, 2005. 2 p. http://forms.sc.egov.usda.gov/efcommon/eFileServices/Forms/FSA2038_050118V02.pdf
5. Small Business Planner. Washington, DC: U.S. Small Business Administration. http://www.sba.gov/smallbusinessplanner/plan/index.html
1. Agricultural Income and Finance. (Annual reports) Washington, DC: U.S. Department of Agriculture, Economic Research Service. http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1254
2. Characteristics and Risk Management Needs of Limited-Resource and Socially Disadvantaged Farmers. Robert Dismukes, Joy L. Harwood, Susan E. Bentley. Agriculture Information Bulletin A1B733. Washington, DC: U.S. Department of Agriculture, Economic Research Service, 1997. 104 p.http://www.ers.usda.gov/publications/aib733
3. Determinants of Financial Performance of Commercial Dairy Farms. Hisham S. El-Osta, James D. Johnson. Technical Bulletin 1859. Washington, DC: U.S. Department of Agriculture, Economic Research Service, 1998. 42 p. http://www.ers.usda.gov/publications/tb1859
4. Exploring the Small Farm Dream: Is Starting an Agricultural Business Right for You? Belchertown, MA: Growing New Farmers Consortium. http://www.smallfarm.org/explorer
5. Farmers Market Consortium: Resource Guide Washington, DC: U.S. Department of Agriculture, Agricultural Marketing Service. Updated 2007.http://www.ams.usda.gov/AMSv1.0/getfile?dDocName=STELDEV3100937&acct=frmrdirmkt pdf file 1.01 MB
6. Financing Small-Scale and Part-Time Farms. Gregory D. Hanson, Jayson K. Harper, George L. Greaser. University Park: Penn State University Cooperative Extension, 2004. 6 p. http://agalternatives.aers.psu.edu/publications/financing_small-part_farms.pdf
7. Financing the Farm Operation. Phillip L Kunkel, Scott T. Larison. FS-02589. St. Paul, University of Minnesota Extension Service, 1998. http://www.extension.umn.edu/distribution/businessmanagement/DF2589.html
8. How to Finance a Small Farm. Karen Klonsky. Family Farm Series. Davis: University of California Small Farm Center, n.d. 6 p. http://www.sfc.ucdavis.edu/Pubs/Family_Farm_Series/Farmmanage/finance.html
9. Starting or Diversifying an Agricultural Business. Lynn F. Kime, Sarah A. Roth, Jayson K. Harper. UA401. University Park: Penn State University Cooperative Extension, 2004. 6 p. http://agalternatives.aers.psu.edu/publications/StartingAgBusiness%20PM7.pdf
10. Structural and Financial Characteristics of U.S. Farms: 2004 Family Farm Report. David E. Banker, James M. MacDonald, editors. Agriculture Information Bulletin AIB797. Washington, DC: U.S. Department of Agriculture, Economic Research Service, 2005. 87 p. http://www.ers.usda.gov/publications/AIB797/DBGen.htm
11. Successful Small Farming. Greensboro: North Carolina A and T State University. http://www.ag.ncat.edu/successfulsmallfarming/Default.htm
12. Tip Sheet for Young and Beginning Farmers: How to Build Successful Financial Relationships. Washington, DC: ABA Center for Agricultural and Rural Banking, n.d. 1 p. http://www.aba.com/NR/rdonlyres/E1577452-246C-11D5-AB7C-00508B95258D/31065/TipsheetforyoungandBeginningFarmers9996.pdf
13. Tools and Resources (to Help New Farmers). Belchertown, MA: Growing New Farmers Consortium. http://growingnewfarmers.org/growingnewfarmers/tools_resources/index.htm
Contacts for Technical Assistance: Both SBA and USDA provide small business planning technical assistance and USDA also provides technical farming specifics through the extensive network of USDA, Cooperative Extension Service (CES) specialists:
Start your financial assistance search with your state Department of Agriculture to see if your state has a Beginning Farmer Loan Program. The Federal government provides tax-exempt status for Beginning Farmer Loan Programs or "Aggie Bonds" that allow states to assist beginning, first-time farmers purchase land, equipment, buildings and livestock with reduced interest rate loans. The state creates the bond that in turn, allows lenders to earn federally-tax exempt interest income on loans to eligible beginning farmers and ranchers. The tax-savings allows the lenders to provide the loans at a reduced interest rate for first time farmers. Aggie Bond programs are federal-state, public-private partnership programs that provide a cost effective way for states to assist beginning farmers.
Information on Small Farms and Farm Financial Management can be located on the USDA's Economic Research Service web site.
Farm Banks: The nation's more than 2,500 farm banks (defined by the Federal Reserve Board as banks that have above average proportions of farm real estate and production loans in their loan portfolios -- around 14 percent and higher) offer a variety of loans to small and large farms and agribusiness firms; they also handle many of the loans made under USDA's guaranteed farm loan programs. Farm banks may provide short-term operating loans, less than a year in duration, for annual expenses such as seed and fertilizer; intermediate-term loans, usually two to five years, for capital expenses such as livestock and equipment; and, long-term loans, lasting ten years or more, for real estate or major structures and construction.
Farm Credit System (FCS): The FCS is a network of slightly more than 100 federally chartered borrower-owned lending institutions and related service organizations that specialize in providing credit and related services to farmers (also young and beginning), ranchers, and producers or harvesters of aquatic products. The FCS's provides credit and lease financing for full-time and two-career farmers. In addition to offering the same category of loans as farm banks, FCS institutions also offer revolving credit lines that are popular financing tools tailored to specific borrowing situations with repayment tied to cash flows. Additional information about the FCS is available from the Farm Credit Administration at http://www.fca.gov/FCS-Institutions.htm
USDA's Farm Service Agency (FSA): The FSA provides a variety of farm loan programs, including raditional operating loans, beginning farmer and youth programs. FSA also includes a mediation program for agricultural disputes.
FSA offers direct and guaranteed farm ownership and operating loans to family-size farmers and ranchers who cannot obtain commercial credit from a bank, Farm Credit System institution, or other lender. Borrowers include beginning farmers who do not qualify for conventional loans because they have insufficient financial resources, as well as established farmers who have suffered financial setbacks from natural disasters, or whose resources are too limited to maintain profitable farming operations. FSA loans can be used to purchase land, livestock, equipment, feed, seed, and supplies; they can also be used for building construction and improvements.
FSA guaranteed loans provide conventional agricultural lenders with up to a 95 percent guarantee of the principal loan amount. The lender is responsible for servicing a borrower's account, including the collection of payments, for the life of the loan. All loans must meet certain qualifying criteria to be eligible for guarantees.. Farmers interested in these loans must apply to a conventional lender, which then arranges for the FSA guarantee.
Addtional U.S. EPA Agriculture Programs
ABA Center for Agricultural and Rural Banking
1-800-BANKERS
Washington, DC: American Bankers Association.
http://www.aba.com/Industry+Issues/issues_ag_menu.htm
Acreage and Small Farm Insight
Lincoln: University of Nebraska.
http://acreage.unl.edu
ATTRA, National Sustainable Agriculture Information Service
1-800-346-9140
Fayetteville, AR.
http://www.attra.org
Center for Farm Financial Management
1-800-234-1111
St. Paul: University of Minnesota.
http://www.cffm.umn.edu
Farm Credit System Foundation
Washington, DC.
http://www.fcsfoundation.org
Growing New Farmers
Belchertown, MA.
http://growingnewfarmers.org
National Ag Risk Education Library
St. Paul: University of Minnesota.
http://www.agrisk.umn.edu/
National Association of State Departments of Agriculture
Washington, DC.
http://www.nasda.org/
New England Small Farm Institute
Belchertown, MA.
http://www.smallfarm.org
Links for New Farmers
Manoa: University of Hawaii.
http://www.ctahr.hawaii.edu/sustainag/NewFarmer/Links.asp
Oregon Small Farms
Corvallis: Oregon State University Extension Service.
http://smallfarms.oregonstate.edu
Small Farm Center
Davis: University of California
http://www.sfc.ucdavis.edu
Small Farm Connection
Puyallup: Washington State University.
http://smallfarms.wsu.edu
Small Farm New Farm Internet Resources
Columbus, Ohio State University Extension.
http://newfarm.osu.edu
Web Resources for Sustainable Production
Pittsboro: North Carolina Cooperative Extension.
http://www.ces.ncsu.edu/chatham/ag/SustAg/webresources.html
Women's Agricultural Network
Burlington: University of Vermont.
http://www.uvm.edu/~wagn
