A Primer to Getting Financing for Your Small Farm

Growing plants

When we think about farms, we often think about large sprawling plains and big rolling hills, teeming with harvest and rich with that rustic, scenic charm that starkly contrasts our busy urban lives. When we think about farms, most of us actually think about large farms. But the real picture of American agriculture comes in smaller magnitude.

What are small farms?

The United States Department of Agriculture categorizes small farms or small family farms as farms sized 231 acres in average – or smaller. The small farmer sells produce worth $1,000 and $50,000 annually. These small family farm operations make up 99 percent of farms in the country, and contribute to 89 percent of the agricultural produce in the US.

Not so small then, isn’t it?

If you think about it, small farms are the lifeblood of American agriculture and majority of American produce are dependent on them – including the allocated designations of the country’s agricultural export. And these farms vary in their produce – from mainly agricultural to ranches raising grazing livestock or a combination of both. Even bee farms!

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What steps should I take to start my own farm?

Managing your own farm and marketing your own goods also take some cunning and good decision-making. The following are the basic steps that you need to take to be successful in your farming business.

  1. If you are a beginner farmer and have no prior knowledge about the task you are to undertake, the first advice to follow is to learn and educate yourself on the craft. Today, there are plenty of resources readily available to the beginner farmer. You can subscribe to magazines both print and online, read websites that tackle about the farming practice, attend seminars, read books, and perhaps learn from gradual experience. If you’re not confident enough to go large scale at once, you can start small and from there, expand until you’re ready to put more time and effort into your business.
  2. Plot a plan. This includes creating the overall design of your farm from the types of crops that you want to grow to the possibility of raising animals. Do you want to invest solely in crops or just want to raise livestock? How do you intend to market your produce? Who are your target market? Consider the potential roadblocks along the way and have possible solutions ready.
  3. Next, you need to consider acreage. How much land are you going to need, depending on your business plan? Have you considered the location? Is it a good location? Can you afford the financing?
  4. And speaking of financing, with all other things considered, you need to look into your small farm loan options. Will you be able to shoulder the cost of financing, on top of the cost of farm maintenance, possibly medical care for the animals, fertilizers for the crops, etc?
  5. When all the previous considerations are taken care of, now you need to settle the legal and commercial requirements to finally set up your business. This includes familiarizing yourself with your local and state laws, registering your business, purchasing a license, acquiring employee identification, and acquiring insurance, among others. See to it that you’ve got everything covered.

A lot of success in farming is about preparing right. Cultivate your motivation, take advantage of opportunities, and get your project off the ground as soon as possible.

Find a USDA lender in your area today!