Beginning Farmers
Additional Steps Needed to Demonstrate the Effectiveness of USDA Assistance Gao ID: GAO-07-1130 September 18, 2007U.S. Department of Agriculture (USDA) programs have long supported beginning farmers. USDA generally defines a beginning farmer or rancher as one who has operated a farm or ranch for 10 years or less--without regard for age--and who materially and substantially participates in its operation. USDA's Farm Service Agency (FSA) makes and guarantees loans for farmers who cannot obtain commercial credit, including beginning farmers. FSA also reserves funds for beginning farmers within its loan programs. USDA's Natural Resources Conservation Service (NRCS) provides higher conservation payments for beginning farmers through two of its conservation programs. GAO reviewed the key steps USDA has taken to help beginning farmers and assessed the department's actions to measure the effectiveness of these steps.
USDA's lending and conservation assistance to beginning farmers has been substantial and is growing. USDA supports beginning farmers primarily through its lending assistance. From fiscal years 2000 through 2006, FSA's lending to beginning farmers rose from $716 million to $1.1 billion annually--totaling more than $6 billion. In addition, from fiscal years 2004 through 2006, the most recent years for which data are available, NRCS's annual financial assistance for beginning farmers through two key conservation programs nearly doubled from over $47 million to nearly $92 million, for a total of $233 million. However, USDA cannot demonstrate the effectiveness of its support for beginning farmers, because it has not developed a crosscutting, departmental strategic goal for its beginning farmer efforts and has only recently begun to analyze the characteristics of this group. Specifically, USDA has not developed a crosscutting, departmental strategic beginning farmer goal that demonstrates the outcomes it expects its beginning farmer efforts to achieve. Such a goal might address, for example, promoting demographic change, such as by decreasing the average age of farmers or changes to the structure of agriculture, such as by increasing the number of small and middle-sized farms. USDA has incorporated beginning farmers into its existing policy for maintaining the viability of small farms. Although this provides added recognition of the need to assist beginning farmers, USDA's policy does not establish a crosscutting, departmental strategic goal that provides a management and accountability focus for the department's several efforts. Furthermore, USDA tracks the numbers of farmers it assists and the dollars they receive, rather than its progress toward achieving a particular beginning farmer outcome. Having a crosscutting, departmental strategic goal could provide better insight into the desired outcomes and impact of USDA's beginning farmer efforts. USDA is just beginning to develop data about the characteristics of beginning farmers to supplement its existing analyses about the age of farmers and changes in the number of farms. For example, one recent analysis shows that beginning farmers are younger than established farmers, operate smaller farms, and are slightly more ethnically diverse and female than other farmers. Another indicates that roughly one-third of beginning farms in 2005 had no agricultural output and were likely operated by individuals interested in a rural residential lifestyle. Continued analysis of such characteristics and trends could provide better insight into who beginning farmers are, which ones USDA assists, and how beginning farmer operations change over time.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-1130, Beginning Farmers: Additional Steps Needed to Demonstrate the Effectiveness of USDA Assistance
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Report to the Chairman, Committee on Agriculture, Nutrition, and
Forestry, U.S. Senate:
United States Government Accountability Office:
GAO:
September 2007:
Beginning Farmers:
Additional Steps Needed to Demonstrate the Effectiveness of USDA
Assistance:
Beginning Farmers:
GAO-07-1130:
GAO Highlights:
Highlights of GAO-07-1130, a report to the Chairman of the Committee on
Agriculture, Nutrition, and Forestry, U.S. Senate.
Why GAO Did This Study:
U.S. Department of Agriculture (USDA) programs have long supported
beginning farmers. USDA generally defines a beginning farmer or rancher
as one who has operated a farm or ranch for 10 years or less”without
regard for age”and who materially and substantially participates in its
operation. USDA‘s Farm Service Agency (FSA) makes and guarantees loans
for farmers who cannot obtain commercial credit, including beginning
farmers. FSA also reserves funds for beginning farmers within its loan
programs. USDA‘s Natural Resources Conservation Service (NRCS) provides
higher conservation payments for beginning farmers through two of its
conservation programs. GAO reviewed the key steps USDA has taken to
help beginning farmers and assessed the department‘s actions to measure
the effectiveness of these steps.
What GAO Found:
USDA‘s lending and conservation assistance to beginning farmers has
been substantial and is growing. USDA supports beginning farmers
primarily through its lending assistance. From fiscal years 2000
through 2006, FSA‘s lending to beginning farmers rose from $716 million
to $1.1 billion annually”totaling more than $6 billion. In addition,
from fiscal years 2004 through 2006, the most recent years for which
data are available, NRCS‘s annual financial assistance for beginning
farmers through two key conservation programs nearly doubled from over
$47 million to nearly $92 million, for a total of $233 million.
However, USDA cannot demonstrate the effectiveness of its support for
beginning farmers, because it has not developed a crosscutting,
departmental strategic goal for its beginning farmer efforts and has
only recently begun to analyze the characteristics of this group.
Specifically:
* USDA has not developed a crosscutting, departmental strategic
beginning farmer goal that demonstrates the outcomes it expects its
beginning farmer efforts to achieve. Such a goal might address, for
example, promoting demographic change, such as by decreasing the
average age of farmers or changes to the structure of agriculture, such
as by increasing the number of small and middle-sized farms. USDA has
incorporated beginning farmers into its existing policy for maintaining
the viability of small farms. Although this provides added recognition
of the need to assist beginning farmers, USDA‘s policy does not
establish a crosscutting, departmental strategic goal that provides a
management and accountability focus for the department‘s several
efforts. Furthermore, USDA tracks the numbers of farmers it assists and
the dollars they receive, rather than its progress toward achieving a
particular beginning farmer outcome. Having a crosscutting,
departmental strategic goal could provide better insight into the
desired outcomes and impact of USDA‘s beginning farmer efforts.
* USDA is just beginning to develop data about the characteristics of
beginning farmers to supplement its existing analyses about the age of
farmers and changes in the number of farms. For example, one recent
analysis shows that beginning farmers are younger than established
farmers, operate smaller farms, and are slightly more ethnically
diverse and female than other farmers. Another indicates that roughly
one-third of beginning farms in 2005 had no agricultural output and
were likely operated by individuals interested in a rural residential
lifestyle. Continued analysis of such characteristics and trends could
provide better insight into who beginning farmers are, which ones USDA
assists, and how beginning farmer operations change over time.
What GAO Recommends:
GAO recommends that USDA adopt a crosscutting, departmental strategic
beginning farmer goal that identifies the desired outcomes for its
beginning farmer assistance and links to related agency performance
goals. We also recommend that USDA track progress toward implementing
these goals. In commenting on a draft of this report, USDA said it
generally agreed with our report and recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-07-1130]. For more information, contact Lisa
Shames, 202-512-3841, shamesl@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
USDA's Lending and Conservation Assistance for Beginning Farmers Has
Increased:
USDA Has Not Demonstrated the Effectiveness of Its Assistance for
Beginning Farmers:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Scope and Methodology:
Appendix II: FSA Loans to Beginning Farmers by State and Loan Type,
Fiscal Year 2006:
Appendix III: EQIP Financial Assistance Approved for Beginning Farmers
by State, Fiscal Year 2006:
Appendix IV: USDA Small Farms and Beginning Farmers and Ranchers
Policy:
Appendix V: FSA and NRCS Beginning Farmer Definitions:
Appendix VI: Comments from the Department of Agriculture:
Appendix VII: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: FSA's Direct and Guaranteed Loans to Beginning Farmers and All
Borrowers, Fiscal Year 2000 through April 30, 2007:
Table 2: EQIP and CSP Financial Assistance Approved, Fiscal Years 2004
through 2006:
Table 3: Selected RMA and CSREES Projects That Assist Beginning
Farmers, Fiscal Year 2006:
Table 4: Selected Statements from USDA's Small Farms and Beginning
Farmers and Ranchers Policy:
Table 5: FSA Loan Program Performance Goals and Measures:
Table 6: RMA Performance Goals Relating to Beginning Farmers, Fiscal
Years 2006-2011:
Table 7: Selected Characteristics of Beginning Farmers:
Table 8: Distribution of Beginning Farmer Borrowers by Type of
Production for FSA Direct Loans Made in Fiscal Years 2005-2006:
Table 9: FSA and NRCS Beginning Farmer Definitions:
Abbreviations:
AMS: Agricultural Marketing Service:
CSP: Conservation Security Program:
CSREES: Cooperative State Research, Education, and Extension Service:
EQIP: Environmental Quality Incentives Program:
ERS: Economic Research Service:
FSA: Farm Service Agency:
NASS: National Agricultural Statistics Service:
NRCS: Natural Resources Conservation Service:
OMB: Office of Management and Budget:
PART: Program Assessment Rating Tool:
RMA: Risk Management Agency:
USDA: United States Department of Agriculture:
United States Government Accountability Office:
Washington, DC 20548:
September 18, 2007:
The Honorable Tom Harkin:
Chairman:
Committee on Agriculture, Nutrition, and Forestry:
United States Senate:
Dear Mr. Chairman:
Since the 1990s, the U.S. Department of Agriculture's (USDA) assistance
to beginning farmers and ranchers has responded to concerns that the
average age of farmers and ranchers is increasing. USDA estimated that
in 2004 about 27 percent of principal farm operators were 65 years of
age or older, while only about 4 percent were under 35. Collectively,
landowners over age 65 owned over one-third of farmland--land that will
ultimately either be passed on to heirs or sold. USDA generally defines
a beginning farmer or rancher as one who has operated a farm or ranch
for 10 years or less, regardless of age, and will materially and
substantially participate in its operation.[Footnote 1] USDA economists
have estimated that beginning farmers operate about 485,000 farms, or
about 25 percent of the nation's nearly 2 million family farms.
Beginning farmers start a wide range of operations, such as livestock,
organic crops, or traditional commodities. Also, their population is
diverse: traditional family farmers, former farm managers, individuals
in career transition, retirees, "hobby" farmers, immigrants, and the
socially disadvantaged.[Footnote 2] Many beginning farmers face
multiple challenges, including obtaining capital to purchase farmland
and fund their operating costs. Because beginning farmers tend to
operate smaller farms and have more limited resources than more
experienced farmers, they may find it difficult to obtain conventional
credit. In addition, the rising cost of farmland, driven in part by
farm subsidies and increasing competition for farmland from urban
development and for producing energy crops, may also make it difficult
for beginning farmers to obtain land. Moreover, beginning farmers may
not be as knowledgeable as more experienced farmers about effective
farming practices, financial and risk management practices, marketing
opportunities, and available assistance programs.
USDA supports beginning farmers primarily through its lending
assistance. USDA's Farm Service Agency (FSA) is a lender of last
resort--FSA provides loans to farmers who have cash flow or collateral
shortcomings that keep them from qualifying for commercial loans. Since
the mid-1990s, USDA has reserved portions of its loan funds for
beginning farmers, as required by the Agricultural Credit Improvement
Act of 1992.[Footnote 3] In addition, USDA's Natural Resources
Conservation Service (NRCS) provides financial and technical assistance
to beginning farmers for conservation practices. The 2002 Farm Security
and Rural Investment Act authorized the Secretary of Agriculture to
provide beginning farmers with up to 90 percent of the cost of
implementing conservation practices under two key NRCS programs--the
Environmental Quality Incentives Program (EQIP) and the Conservation
Security Program (CSP), while more established farmers are limited to
receiving up to 75 percent of their costs. Beginning farmers are also
eligible for other USDA programs, such as the Crop Insurance Program,
and may benefit from grant programs that provide assistance for
production, marketing, and financial risk management.
In addition to USDA's assistance, beginning farmers also obtain loans
through the Farm Credit System, commercial banks, life insurance
companies, and individuals. The Farm Credit System is a government-
sponsored enterprise with a nationwide network of lenders that Congress
created to provide a dependable source of credit and related services
to the agricultural community. Since the 1980s, the Farm Credit System
has had a special congressional mission to serve young, beginning, and
small farmers.[Footnote 4] As of December 2006, the Farm Credit System
had in its portfolio over 189,000 loans to beginning farmers valued at
$25.4 billion.
For the 2007 Farm Bill, USDA and others have proposed that Congress
take additional steps to build up USDA's programs to help beginning
farmers. For example, USDA proposed raising direct loan limits for farm
ownership and operating loans to a combined limit of $500,000, up from
$200,000 for each type of loan. USDA also proposed setting aside 10
percent of conservation funds for beginning and socially disadvantaged
farmers. Additionally, stakeholder groups have suggested, among other
things, providing tax incentives for selling land to beginning farmers
and ranchers and making research on beginning farmers and farm transfer
a priority.
GAO has issued multiple reports that address USDA support to beginning
farmers. For example, in 1982, GAO reported that little data were
available to demonstrate the effect of existing farm programs on
beginning farmers.[Footnote 5] More broadly, in 2006, we concluded that
better oversight of farm program funds is necessary to ensure they are
spent as economically, efficiently, and effectively as
possible.[Footnote 6] Because USDA provides billions in beginning
farmer assistance, it is important that the department be able to
demonstrate the effectiveness of these programs.
You asked us to (1) identify the key steps USDA has taken to help
beginning farmers and (2) assess USDA's actions to measure the
effectiveness of these steps.
To determine the key steps USDA has taken to help beginning farmers, we
reviewed USDA and agency documents on loan and conservation programs
and spoke with officials who administer these and other relevant
programs. In addition, we interviewed agricultural stakeholders from
universities, organizations that work with beginning and small farmers,
farm advocacy groups, and some states with targeted beginning farmer
loan programs. To identify USDA's actions to assess the effectiveness
of its programs in addressing beginning farmer challenges, we reviewed
USDA reports, strategic plans, and program performance data. A more
detailed description of our scope and methodology is presented in
appendix I. We performed our work between September 2006 and August
2007 in accordance with generally accepted government auditing
standards.
Results in Brief:
USDA lending and conservation assistance to beginning farmers has been
substantial and is growing. From fiscal year 2000 through fiscal year
2006, FSA's lending to beginning farmers rose from $716 million to $1.1
billion annually--for a total of more than $6 billion in loans. The
$1.1 billion that FSA loaned to beginning farmers in fiscal year 2006
was 35 percent of the total amount USDA loaned all farmers. Assistance
provided by NRCS through two key conservation programs--EQIP and CSP--
has also increased. From fiscal year 2004 through 2006, the most recent
years for which data are available, the amount of financial assistance
for beginning farmers nearly doubled from over $47 million to nearly
$92 million, for a total of $233 million. The $92 million for beginning
farmers in fiscal year 2006 was 11 percent of the assistance for all
farmers through these programs.
However, despite these multiple forms of assistance provided to
beginning farmers, USDA has not demonstrated the effectiveness of its
efforts to assist this group. First, USDA has not developed a
crosscutting, departmental strategic goal to track the effectiveness of
its multiple beginning farmer efforts. Second, USDA has only recently
begun to develop baseline information about the characteristics of
beginning farmers and their farming operations that should help it
evaluate and better target its beginning farmer efforts. More
specifically:
Crosscutting, departmental strategic performance goal. USDA has not
developed a crosscutting, departmental strategic beginning farmer goal
that demonstrates the outcomes it expects its several beginning farmer
efforts to achieve. Such a goal might relate to, for example, promoting
demographic change, such as by decreasing the average age of farmers or
changes to the structure of agriculture, such as by increasing the
number of small and middle-sized farms. In 2006, USDA took a step to
better recognize the importance of assisting beginning farmers by
including beginning farmers in its existing departmental policy
designed to maintain the viability of small farms. However, this
revised policy does not provide a management and accountability focus
for USDA's efforts. Moreover, agency beginning farmer goals currently
in place track the numbers of farmers assisted and dollars provided to
them, rather than measuring outcomes. For example, FSA reported having
42,495 beginning and socially disadvantaged borrowers in its portfolio
in fiscal year 2006--15.5 percent of its estimate of the 273,349
beginning and socially disadvantaged farmers who had at least $10,000
in sales. In effect, FSA measures its volume in providing loans to
these groups, rather than measuring progress toward achieving a
particular beginning farmer outcome, such as improving the financial
well-being of beginning farmers or ensuring they continue to farm after
leaving the loan program. More outcome-based information could provide
additional insight into program effectiveness and allow FSA to evaluate
the extent to which its loan programs contribute to a crosscutting,
departmental strategic goal.
Baseline information about beginning farmer characteristics. USDA has
recently begun to develop baseline information about the
characteristics of beginning farmers to supplement its existing
analyses about the age of farmers and changes in the number of farms.
For example, one recent analysis shows that beginning farmers are
younger than established farmers, operate smaller farms, and are
slightly more ethnically diverse and female than other farmers. Another
indicates that roughly one-third of beginning farms in 2005 had no
agricultural output and were likely operated by individuals interested
in a rural residential lifestyle. Continued analysis of such
characteristics and trends could provide better insight into who
beginning farmers are, which ones USDA assists, and how beginning
farmer operations in agriculture change over time.
To provide Congress and the public with a more comprehensive
understanding of the effectiveness of USDA's beginning farmer efforts
and to establish a basis for monitoring its programs, we are
recommending that the Secretary of Agriculture adopt a crosscutting,
departmental strategic beginning farmer goal and related agency goals,
as well as track progress toward accomplishing them. USDA commented on
a draft of this report and stated it generally agreed with our report
and recommendations. Specifically, USDA commented that it would be able
to develop more focused performance measures once the 2007 Farm Bill is
complete.
Background:
The Food, Agriculture, Conservation, and Trade Act of 1990 (the 1990
Farm Bill) required, among other things, that the Secretary give
priority to beginning farmers in purchasing inventory farmland--
properties that have come into government ownership through voluntary
conveyance or foreclosure.[Footnote 7] It also expressed the sense of
Congress that USDA maintain statistics on, among other things, the
number of loans made, insured, or guaranteed, and inventory farmland
sold or leased to beginning farmers, and that USDA establish innovative
programs of finance and assistance for land transfer between
generations and the establishment of new farms. Currently, FSA's limits
on direct loans for farm ownership and operations are each set at
$200,000, while the guaranteed farm ownership and operating loan
amounts are each set at $899,000. FSA allocates money to the states for
its loan programs on the basis of the number of farmers in each state,
the value of farm assets, and net farm income. For this allocation, the
loan volumes of previous years may be considered as well.
The Agricultural Credit Improvement Act of 1992 required the Secretary
of Agriculture to reserve a portion of its direct and guaranteed farm
ownership and operating loan funds for beginning farmers and
ranchers.[Footnote 8] It also authorized the establishment of the Down
Payment Farm Ownership Loan Program, administered by FSA. This program
allows a beginning farmer to purchase a farm or ranch of up to $250,000
in value. To participate in this loan program, an applicant must make a
cash down payment of at least 10 percent of the purchase price. FSA may
provide up to 40 percent of the purchase or appraisal price over 15 or
fewer years at a fixed interest rate of 4 percent. The balance may be
obtained from another lender, with FSA providing up to a 95 percent
guarantee. In addition, in accordance with the act, FSA has entered
into memorandums of understanding with 21 states to provide joint
financing to beginning farmers.
The 1992 act also directed that the Secretary establish an Advisory
Committee on Beginning Farmers and Ranchers to advise the Secretary on
methods of creating new farming and ranching opportunities, among other
things. The advisory committee includes representatives from the
farming, ranching, and banking industries; extension education;
nonprofit agencies; and federal and state staff who work directly with
beginning farmers. Since it was established in 1998, the committee has
met eight times, submitting recommendations to the Secretary to improve
and increase opportunities for beginning farmers in starting and
maintaining viable farming operations. Recently, these proposals have
ranged from recommendations to develop a pilot program for providing
matched savings accounts for beginning farmers to encouraging those
with expiring Conservation Reserve Program easements to transfer their
land to beginning farmers.[Footnote 9] Previously implemented
recommendations have led to the 2006 addition of beginning farmers to
USDA's small farms policy, which led to the establishment of the Small
Farms and Beginning Farmers and Ranchers Council.
The Farm Security and Rural Investment Act of 2002 (the 2002 Farm Bill)
authorized higher payments in two key conservation programs geared
toward working lands--EQIP and CSP.[Footnote 10] EQIP provides farmers
with financial and technical assistance to address soil, air, water,
and related natural resource concerns on eligible land, while CSP
supports ongoing stewardship of farmland by providing payments to
producers for maintaining and enhancing conservation efforts that
benefit natural resources. For both programs, the 2002 Farm Bill
authorized the Secretary to provide a higher cost-share for beginning
farmers--up to 90 percent of the cost of implementing a conservation
practice--compared to 75 percent for other producers. For EQIP, the act
also authorized higher cost-share payments for limited resource
producers. In 2006, on average, NRCS provided a cost-share rate of
almost 80 percent for beginning farmers through EQIP, compared with an
average of 59 percent for non-limited-resource, established farmers.
For CSP, the 2006 sign-up reduced the cost-share rate for new practice
payments to not more than 65 percent for limited resource and beginning
farmers and to not more than 50 percent for other producers.[Footnote
11]
Furthermore, the 2002 Farm Bill authorized the Secretary to create a
pilot program to provide guarantees of loans made by private sellers of
a farm or ranch to beginning farmers on a contract sale basis. It also
authorized the Secretary to reserve at least 15 percent of funds in its
interest rate reduction program--a program to subsidize the interest
rate on a guaranteed operating loan--for beginning farmers. Finally,
the 2002 Farm Bill also authorized a Beginning Farmer and Rancher
Development Program to provide training, education, outreach, and
technical assistance initiatives, but no funding has been allocated to
this program.
USDA's Lending and Conservation Assistance for Beginning Farmers Has
Increased:
USDA's lending and conservation assistance to beginning farmers has
been substantial and is growing. From fiscal year 2000 through 2006,
FSA increased its lending to beginning farmers from $716 million to
$1.1 billion annually, for a total of more than $6 billion during the
period. Also, from fiscal years 2004 through 2006 (the most recent
years for which data are available), NRCS's assistance to beginning
farmers through two key conservation programs nearly doubled, from over
$47 million to about $92 million.
Lending to Beginning Farmers Exceeds $1 Billion per Year:
From fiscal years 2000 through 2006, FSA increased the value of its
loans to beginning farmers from $716 million to $1.1 billion annually,
for a total of more than $6 billion over the period. In addition,
beginning farmers received an increasing share of FSA's loan dollars,
from a 20 percent share in fiscal year 2000 to 35 percent by fiscal
year 2006--or 27 percent of the amount FSA loaned all farmers over this
period. At the end of fiscal year 2006, FSA had 25,064 beginning farmer
borrowers in its loan portfolio. Of these borrowers, 16,828 had
obtained 28,022 direct loans as of October 4, 2006, and 8,236 had
obtained 11,735 guaranteed loans as of September 30, 2006. FSA also
provided interest assistance on 2,409 of the guaranteed operating loans
it made to beginning farmers between fiscal year 2000 and 2006. Through
these loans, it obligated approximately $358 million--12 percent of
guaranteed operating loan dollars with interest assistance obligated to
all farmers. Table 1 provides more detailed information about FSA's
direct and guaranteed loans to beginning farmers. Appendix II provides
information on fiscal year 2006 loans to beginning farmers by state.
Table 1: FSA's Direct and Guaranteed Loans to Beginning Farmers and All
Borrowers, Fiscal Year 2000 through April 30, 2007:
Dollars in millions.
Year: 2000;
Number of beginning farmer loans: 8,109;
Beginning farmer loan dollars obligated: $716.2;
Total number of loans: 31,040;
Total loan dollars obligated: $3,571.3;
Percentage of total loan dollars to beginning farmers: 20.
Year: 2001;
Number of beginning farmer loans: 8,003;
Beginning farmer loan dollars obligated: 706.6;
Total number of loans: 28,243;
Total loan dollars obligated: 3,168.5;
Percentage of total loan dollars to beginning farmers: 22.
Year: 2002;
Number of beginning farmer loans: 8,691;
Beginning farmer loan dollars obligated: 839.5;
Total number of loans: 29,511;
Total loan dollars obligated: 3,496.8;
Percentage of total loan dollars to beginning farmers: 24.
Year: 2003;
Number of beginning farmer loans: 8,633;
Beginning farmer loan dollars obligated: 851.2;
Total number of loans: 29,196;
Total loan dollars obligated: 3,520.9;
Percentage of total loan dollars to beginning farmers: 24.
Year: 2004;
Number of beginning farmer loans: 8,572;
Beginning farmer loan dollars obligated: 867.5;
Total number of loans: 26,060;
Total loan dollars obligated: 3,073.6;
Percentage of total loan dollars to beginning farmers: 28.
Year: 2005;
Number of beginning farmer loans: 9,592;
Beginning farmer loan dollars obligated: 1,030.3;
Total number of loans: 25,968;
Total loan dollars obligated: 3,022.9;
Percentage of total loan dollars to beginning farmers: 34.
Year: 2006;
Number of beginning farmer loans: 10,677;
Beginning farmer loan dollars obligated: 1,082.8;
Total number of loans: 26,999;
Total loan dollars obligated: 3,073.6;
Percentage of total loan dollars to beginning farmers: 35.
Year: 2007[A];
Number of beginning farmer loans: 6,995;
Beginning farmer loan dollars obligated: 709.0;
Total number of loans: 17,295;
Total loan dollars obligated: 2,035.5;
Percentage of total loan dollars to beginning farmers: 35.
Total;
Number of beginning farmer loans: 69,272;
Beginning farmer loan dollars obligated: $6,803.1;
Total number of loans: 214,312;
Total loan dollars obligated: $24,963.0;
Percentage of total loan dollars to beginning farmers: [Empty].
Source: GAO analysis of FSA data.
Note: Totals may not add due to rounding.
[A] Fiscal year 2007 data represent the number of loans and obligations
as of April 30, 2007.
[End of table]
Beginning farmers can also take advantage of FSA's joint financing
plans and Down Payment Farm Ownership Loan Program. FSA's joint
financing plans have been more popular than the down payment loan
program, in part because they have longer loan terms and do not require
a down payment. They allow a borrower to receive up to 50 percent of
the amount financed through FSA at a reduced interest rate, with
another lender providing 50 percent or more of the loan. Through joint
financing arrangements, FSA has made 2,395 loans to beginning farmers
that provided over $287 million in direct loan assistance between
fiscal years 2000 and 2006. Through the Down Payment Farm Ownership
Loan Program, FSA made 777 loans to beginning farmers, providing over
$42 million in direct loan assistance over the same period. In addition
to providing loans, FSA sells properties to beginning farmers from its
inventory of farmland properties. From fiscal years 2000 through 2006,
it sold 48 properties to beginning farmers, or 4 percent of the 1,136
sold to all farmers over this time period. This form of assistance has
been used infrequently in recent years because FSA's farm inventory has
been declining.
Conservation Assistance for Beginning Farmers Nearly Doubled between
Fiscal Years 2004 and 2006:
NRCS conservation financial assistance for beginning farmers through
EQIP and CSP increased from over $47 million in fiscal year 2004 to
about $92 million in fiscal year 2006.[Footnote 12] In total, NRCS
approved about $233 million in financial assistance for beginning
farmers through these two programs from fiscal years 2004 through 2006-
-about 9 percent of the amount for all farmers. Table 2 shows EQIP and
CSP assistance for beginning farmers over this period. Appendix III
provides information on EQIP financial assistance approved for
beginning farmers in fiscal year 2006 by state.
Table 2: EQIP and CSP Financial Assistance Approved, Fiscal Years 2004
through 2006A:
Dollars in millions.
Year: 2004;
Program: EQIP;
Beginning farmers: Number of contracts: 2,274;
Beginning farmers: Financial assistance: $47.3;
All farmers: Number of contracts: 46,413;
All farmers: Financial assistance: $718.2.
Year: 2005;
Program: EQIP;
Beginning farmers: Number of contracts: 4,135;
Beginning farmers: Financial assistance: 92.2;
All farmers: Number of contracts: 49,406;
All farmers: Financial assistance: 794.3.
Year: 2006;
Program: EQIP;
Beginning farmers: Number of contracts: 3,377;
Beginning farmers: Financial assistance: 91.1;
All farmers: Number of contracts: 41,190;
All farmers: Financial assistance: 788.0.
Subtotal;
Program: EQIP;
Beginning farmers: Number of contracts: 9,786;
Beginning farmers: Financial assistance: $230.7;
All farmers: Number of contracts: 137,009;
All farmers: Financial assistance: $2,300.4.
Year: 2004;
Program: CSP;
Beginning farmers: Number of contracts: 20;
Beginning farmers: Financial assistance: $.2;
All farmers: Number of contracts: 2,188;
All farmers: Financial assistance: $35.2.
Year: 2005;
Program: CSP;
Beginning farmers: Number of contracts: 150;
Beginning farmers: Financial assistance: 1.4;
All farmers: Number of contracts: 12,780;
All farmers: Financial assistance: 145.7.
Year: 2006;
Program: CSP;
Beginning farmers: Number of contracts: 107;
Beginning farmers: Financial assistance: .7;
All farmers: Number of contracts: 4,323;
All farmers: Financial assistance: 49.6.
Subtotal;
Program: CSP;
Beginning farmers: Number of contracts: 277;
Beginning farmers: Financial assistance: $2.3;
All farmers: Number of contracts: 19,291;
All farmers: Financial assistance: $230.5.
Total;
Program: EQIP and CSP;
Beginning farmers: Number of contracts: [Empty];
Beginning farmers: Financial assistance: $232.9;
All farmers: Number of contracts: [Empty];
All farmers: Financial assistance: $2,530.9.
Source: NRCS.
Note: Totals and subtotals may not add due to rounding.
[A] CSP financial assistance data represent payments approved for new
contracts in the given fiscal year. Payments farmers receive in
subsequent years for ongoing contracts are not reflected in the table.
According to the Congressional Research Service, for example, in fiscal
year 2006, funding for new and existing contracts was limited to $259
million, of which approximately $50 million was available for new
contracts.
[End of table]
Other USDA Programs Assist Beginning Farmers:
Programs administered by USDA's Risk Management Agency (RMA) and
Cooperative State Research, Education, and Extension Service (CSREES)
have funded organizations assisting farmers with risk management and
other challenges. For example, RMA administers several partnership
programs--in conjunction with state departments of agriculture,
universities, nonprofit agricultural organizations, and other public or
private organizations--to deliver training and information on
production, marketing, and financial risk management to
farmers.[Footnote 13] Some proposals funded through these programs have
addressed beginning farmer needs. Additionally, the Community Outreach
and Assistance Partnership Program provides higher scores to applicants
that partner with organizations that can meet the needs of beginning
farmers and other underserved producers. In addition, the Cooperative
State Research, Education, and Extension Service provides grants to
universities, colleges, and nonprofit organizations to deliver outreach
and assistance to socially disadvantaged farmers and ranchers,
including farm, management, and marketing assistance. Table 3 describes
some of the projects these two agencies have funded that have a focus
on beginning farmers.
Table 3: Selected RMA and CSREES Projects That Assist Beginning
Farmers, Fiscal Year 2006:
Program: RMA Commodity Partnerships Program for Risk Management
Education;
Organization: Minnesota Fruit and Vegetable Growers Association;
Amount of award: $149,511;
Objective/project goals: Provide an integrated set of educational
conferences and workshops for existing producers, beginning growers,
producers planning to transfer the farm to the next generation,
farmers' market vendors, and managers.
Program: RMA Commodity Partnerships Small Sessions Program;
Organization: Oregon State University;
Amount of award: $10,000;
Objective/project goals: Provide risk management education to new and
beginning farmers of specialty crops in Jackson and Josephine Counties.
Producers will learn how to create farm business and marketing plans,
use diversification strategies for choosing enterprises, use and employ
crop insurance, and understand the various direct marketing techniques
available to small producers.
Program: RMA Community Outreach and Assistance Partnership Program;
Organization: Land Stewardship Project;
Amount of award: $90,000;
Objective/project goals: To increase the quality and quantity of
support and service for socially disadvantaged beginning farmers at all
stages of farming, from exploration through establishment.
Program: CSREES Outreach and Assistance for Socially Disadvantaged
Farmers and Ranchers;
Organization: University of Maryland Eastern Shore;
Amount of award: $200,000;
Objective/project goals: To bridge the gap between traditional farmers
and minority, women, new and beginning farmers and ranchers by
designing programs that assist them to acquire, own, operate, and
retain farms and ranches.
Source: Risk Management Agency and Cooperative State Research,
Education, and Extension Service.
[End of table]
In addition, the Agricultural Marketing Service has programs such as
the Farmers Market Promotion Program to help farmers directly market
their products, which may indirectly assist beginning farmers. This
grant program targets funds to agricultural cooperatives; local
governments; nonprofit, public health, and economic development
corporations; regional farmers' market authorities; and tribal
governments to work toward expanding direct producer-to-consumer
marketing opportunities. These include farmers' markets, roadside
stands, community-supported agriculture programs, and others.
USDA Has Not Demonstrated the Effectiveness of Its Assistance for
Beginning Farmers:
USDA has several efforts under way through multiple agencies that
assist beginning farmers. However, it is unable to demonstrate the
effectiveness of its assistance to this group because (1) it does not
have a crosscutting, departmental strategic goal to guide its beginning
farmer efforts and because (2) it has only recently begun to develop
information on the characteristics of beginning farmers, which will
supplement its existing research on the age of farmers and changes in
the number of farms.
USDA Lacks a Crosscutting, Departmental Strategic Goal for Its
Beginning Farmer Efforts:
Although many reasons exist for helping beginning farmers, USDA has not
transformed these reasons into a crosscutting, departmental strategic
goal that demonstrates the outcomes it expects its beginning farmer
efforts to achieve. Without such a goal, USDA runs the risk that its
several efforts are not mutually reinforcing or coordinated. Such a
goal could address the reasons for beginning farmer assistance cited in
Congress and by stakeholders and others. For example, relevant
congressional committee reports cite the importance of encouraging
young people to enter farming in order to address concerns about the
nation's aging farmer population. Stakeholders cite additional reasons
for beginning farmer assistance, such as promoting social change by
increasing the number of immigrant and minority farmers and changes to
the structure of agriculture by increasing the number of small and
middle-sized farms.
In 2006, USDA incorporated beginning farmers into its small farms
policy to better recognize the importance of assisting beginning
farmers. The Small Farms and Beginning Farmers and Ranchers Policy is
designed to provide a framework for maintaining the viability of small
and beginning farmer operations. It highlights numerous priorities as
shown in table 4--from supporting the special needs of beginning
farmers to emphasizing socially desirable strategies for this group. It
also calls for agencies and mission areas to reflect the small and
beginning farmer policy in their strategic plans, performance plans,
and other documents. However, the policy does not provide a management
and accountability focus for USDA's efforts. (See app. IV for a
complete copy of USDA's policy). Furthermore, USDA strategic planning
documents contain a beginning farmer performance goal specific to the
FSA loan programs, but they do not integrate USDA's and its multiple
agencies' several efforts to assist beginning farmers.
Table 4: Selected Statements from USDA's Small Farms and Beginning
Farmers and Ranchers Policy:
It is the policy of USDA to:
* Enable farmers, farm workers and ranchers to live and work in a safe
and responsible environment, own and operate farms and ranches as a
livelihood, and enhance opportunities for them to generate farm and
ranch incomes comparable to other economic sectors where feasible.
* Establish and support research, development, marketing, incentive,
regulatory, and outreach programs and initiatives that focus on the
special needs of small farms and beginning farmers and ranchers.
* Encourage and emphasize educational, outreach, marketing, regulatory,
credit, and other programs that will help ensure new generations of
small farmers and ranchers can gain access to the resources they need.
* ...emphasize sustainable agriculture, sustainable forestry, and
agroforestry as profitable, environmentally sound, and socially
desirable strategies for small farms and beginning farmers and
ranchers.
Source: USDA Departmental Regulation 9700-001, Small Farms and
Beginning Farmers and Ranchers Policy, August 3, 2006.
[End of table]
A crosscutting, departmental strategic beginning farmer goal could
provide needed direction for USDA agencies and help ensure their
efforts to assist beginning farmers work toward a common purpose and
serve similar clients. For example, such a crosscutting goal could help
address concerns about whether FSA's loans and NRCS's conservation
assistance are directed toward similar groups of beginning farmers.
FSA's loan programs are geared toward beginning farmers with limited
economic resources--those who cannot access credit from another source.
However, NRCS's definition of a beginning farmer does not contain any
income limitations. Not only are these programs serving different
groups of farmers, there are unintended consequences as well. According
to an NRCS document, the agency's higher cost-share rates for beginning
farmers have the potential to attract wealthy, retired, and absentee
landowners. For example, an NRCS official told us of a case where a
beginning farmer receiving NRCS assistance reported having an income of
about $1 million, and another said his state did not offer a higher
EQIP cost-share rate for beginning farmers because of concerns that
wealthy beginning farmers would benefit. Appendix V contains
information about NRCS's and FSA's beginning farmer definitions.
While USDA has not established a crosscutting, departmental strategic
goal for beginning farmers, two USDA agencies--FSA and RMA--have each
developed their own beginning farmer performance goals. These goals set
targets for the volume of their beginning farmer activities--the number
of farmers assisted and the dollars they receive--rather than outcomes.
Specifically, FSA annually tracks the volume of its lending to a
combined grouping of its borrowers--including beginning farmers and
socially disadvantaged farmers (racial and ethnic minority farmers and
women farmers). FSA measures its performance by the increase in lending
to these combined groups. For example, as shown in table 5, FSA
reported that in 2006, 39 percent of its loan funds were obligated to
these groups. Starting in fiscal year 2006, FSA adopted a related
performance goal that tracks increases in the number of beginning
farmers, racial and ethnic minority farmers, and women farmers in its
portfolio as a percentage of individuals in this category with at least
$10,000 in sales.[Footnote 14] FSA reported having 42,495 beginning and
socially disadvantaged borrowers in its portfolio in fiscal year 2006-
-15.5 percent of its estimate of the 273,349 beginning and socially
disadvantaged farmers who have at least $10,000 in sales.[Footnote 15]
In effect, FSA measures its volume in providing loans to these groups,
rather than measuring progress toward achieving a particular beginning
farmer outcome, such as improving the financial well-being of beginning
farmers or ensuring they continue to farm after leaving the loan
program. Goals related to outcomes could provide additional insight
into program effectiveness and allow FSA to evaluate the extent to
which its loan programs contribute to a crosscutting, departmental
goal.
In addition to its specific beginning farmer goals, FSA also has broad
performance goals related to its loan program. For example, one goal
addresses the frequency with which farmers graduate from FSA's direct
loan program to its guaranteed loan program. Other goals address the
efficiency of FSA's lending as shown in table 5.
Table 5: FSA Loan Program Performance Goals and Measures:
Performance goals and measures: Goals directly related to beginning
farmers: Increase lending to minority, women, and beginning farmers
(percentage of loan obligations)[B];
Measures: Fiscal year 2006 actual: 39;
Measures: Fiscal year 2007 goal: 37.1;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010): X;
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): X;
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Goals directly related to beginning
farmers: Increase percentage of beginning farmers, racial and ethnic
minority farmers, and women farmers financed by FSA (percent)[C];
Measures: Fiscal year 2006 actual: 15.5;
Measures: Fiscal year 2007 goal: 16.0;
Goal reported in: USDA Strategic Plan (fiscal years 2005- 2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): X;
Goal reported in: OMB Program Rating (PART)[A]: [Empty].
Performance goals and measures: Goals directly related to beginning
farmers: Reduce first-year delinquency rates on new loans (percent);
Measures: Fiscal year 2006 actual: 7;
Measures: Fiscal year 2007 goal: 10;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: [Empty].
Performance goals and measures: Goals directly related to beginning
farmers: Reduce average processing time for direct loans (number of
days);
Measures: Fiscal year 2006 actual: 31;
Measures: Fiscal year 2007 goal: 34.5;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): X;
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): X;
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Goals directly related to beginning
farmers: Reduce average processing time for guaranteed loans (number of
days);
Measures: Fiscal year 2006 actual: 12.63;
Measures: Fiscal year 2007 goal: 14;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): X;
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): X;
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Goals directly related to beginning
farmers: Maintain or reduce direct loan loss rate (percent);
Measures: Fiscal year 2006 actual: 2.6;
Measures: Fiscal year 2007 goal: 3.2;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): X;
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Goals directly related to beginning
farmers: Maintain or reduce guaranteed loan loss rate (percent);
Measures: Fiscal year 2006 actual: .34;
Measures: Fiscal year 2007 goal: 1;
Goal reported in: USDA Strategic Plan (fiscal years 2005- 2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): X;
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Goals directly related to beginning
farmers: Maintain or reduce direct loan delinquency rate (percent);
Measures: Fiscal year 2006 actual: 8.1;
Measures: Fiscal year 2007 goal: 9.7;
Goal reported in: USDA Strategic Plan (fiscal years 2005- 2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Goals directly related to beginning
farmers: Maintain or reduce guaranteed loan delinquency rate (percent);
Measures: Fiscal year 2006 actual: 1.45;
Measures: Fiscal year 2007 goal: 1.99;
Goal reported in: USDA Strategic Plan (fiscal years 2005- 2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: [Empty].
Performance goals and measures: Goals directly related to beginning
farmers: Administrative cost per loan (percent);
Measures: Fiscal year 2006 actual: 1.91;
Measures: Fiscal year 2007 goal: 2.03;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Other performance goals: Increased
revenue and profit of farms and ranches (dollars);
Measures: Fiscal year 2006 actual: N/A;
Measures: Fiscal year 2007 goal: $55 billion;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: X.
Performance goals and measures: Other performance goals: Graduate
direct borrowers to the guaranteed program (percent);
Measures: Fiscal year 2006 actual: 35;
Measures: Fiscal year 2007 goal: 33;
Goal reported in: USDA Strategic Plan (fiscal years 2005-2010):
[Empty];
Goal reported in: USDA Performance and Accountability Report (fiscal
year 2006): [Empty];
Goal reported in: FSA Strategic Plan Framework (fiscal years 2005-
2011): [Empty];
Goal reported in: OMB Program Rating (PART)[A]: X.
Source: USDA and Office of Management and Budget documents.
Note: N/A refers to data that was not available at the time we wrote
this report.
[A] The Office of Management and Budget (OMB) performed a Program
Assessment Rating Tool (PART) review of the FSA guaranteed loan program
in 2003 and a review of the direct loan program in 2004, and assessed
both of these programs as moderately effective.
[B] In 2007, FSA combined its goal for beginning and socially
disadvantaged farmers--women and minority farmers--into a single goal.
It also modified its formula for calculating lending to this group to
eliminate the double counting of borrowers who are both beginning and
socially disadvantaged farmers.
[C] FSA developed this goal in fiscal year 2006. This goal reflects the
number of beginning farmers, racial and ethnic minorities, and women
currently in FSA's loan portfolio divided by the total number of all
principal farm operators in the 2002 Census of Agriculture with $10,000
or more in gross sales who were identified as minority, women, or
beginning farmers (farmers with less than 10 years on their present
farm).
[End of table]
In addition to the information FSA tracks on the number and types of
borrowers served, a 2005 University of Arkansas study provides insight
into the effectiveness of USDA's direct loan program for beginning
farmers that could provide one basis for developing FSA performance
goals that feed into a departmental, crosscutting goal.[Footnote 16]
The study focused on borrowers, including beginning farmers,
originating FSA direct loans between fiscal year 1994 and 1996. Among
other things, the study found that beginning farmer borrowers had
positive average annual change in their net worth, potentially
indicating financial progress. It also found that about 82 percent of
those who received beginning farmer direct farm ownership loans who had
left the loan program by 2004 had graduated to another form of credit,
such as FSA guaranteed loans or commercial loans, or no longer needed
credit. The remainder left farming voluntarily (approximately 13
percent); involuntarily, such as due to financial stress (approximately
3 percent); or died (approximately 3 percent).[Footnote 17]
Like FSA, RMA has performance goals related to beginning farmers and
tracks actions, as table 6 shows. However, tracking actions provides
limited performance information and does not indicate the level of
improvement.
Table 6: RMA Performance Goals Relating to Beginning Farmers, Fiscal
Years 2006-2011:
Performance goals: Improve the delivery mechanisms and reduce barriers
to participation for risk management tools targeted for small farms and
beginning limited resource producers;
Baseline 2006: Development of two risk management tools is targeted to
small farms and beginning limited resource producers to increase
participation;
Target 2011: Improve communications and delivery mechanisms for new
risk management tools that are targeted to increase the participation
of small farms and beginning limited resource producers.
Performance goals: Provide small farms and beginning limited resource
producers with information and technical assistance necessary to access
and participate in RMA programs;
Baseline 2006: Progress measured in numbers served. Information and
technical assistance provided to 50,000 small farms and beginning
limited resource producers;
Target 2011: Progress measured in improved ability to manage risks.
Seventy percent of producer participants in an RMA-funded educational
activity will report that they are more prepared to manage risks as a
result of participating in the RMA-funded activity.
Performance goals: Educate small farms and beginning limited resource
producers on risk management strategies;
Baseline 2006: Utilize 62 Outreach Partnerships to provide training on
risk management strategies to small farms and beginning limited
resource producers;
Target 2011: Utilize 75 Outreach Partnerships to provide training on
risk management strategies to small farms and beginning limited
resource producers.
Source: RMA Strategic Plan for fiscal year 2006-2011.
Note: In addition to the goals reflected in this table, RMA has
established additional performance goals more broadly related to its
programs.
[End of table]
Other agencies we spoke with--NRCS, the Agricultural Marketing Service,
and the Cooperative State Research, Education, and Extension Service--
do not have beginning farmer performance goals. NRCS officials told us
their performance goals are driven by their natural resource and
environmental goals and do not directly target beginning farmers.
Cooperative State Research, Education, and Extension Service and
Agricultural Marketing Service officials said they have not developed
beginning farmer performance goals because their programs benefit
farmers broadly, rather than providing targeted assistance to this
group.
Nevertheless, achieving a common goal of importance often requires
collaborative efforts among agencies. In 2005, GAO reported that
collaborative efforts require agencies to define and articulate the
common purpose or outcome they are seeking to achieve.[Footnote 18] In
addition, GAO reported that agencies' collaborative efforts can be
enhanced and sustained by, among other things, establishing mutually
reinforcing or joint strategies; identifying and addressing needs by
leveraging resources; establishing compatible policies and procedures;
and developing mechanisms to monitor, evaluate, and report on results.
USDA Has Begun to Develop Information on Beginning Farmers That Could
Help Better Target Its Efforts:
USDA has recently begun to develop baseline information about beginning
farmer characteristics, which should help the department evaluate and
better target its beginning farmer efforts. Among other things,
recently developed analysis of existing data shows that beginning
farmers are younger than established farmers (about 7 in 10 beginning
farmers are under 55 years of age), operate smaller farms, and are
slightly more ethnically diverse and female than other farmers. Table 7
provides some recent data on beginning farmers that was developed by
economists from USDA's Economic Research Service (ERS). These data
estimate there were 484,981 beginning farmers with less than 10 years
of experience operating farms from which $1,000 or more of agricultural
products were produced and sold or normally would have been sold during
the year.
Table 7: Selected Characteristics of Beginning Farmers:
Number of farms;
Established farmers: 1,476,558;
Beginning farmers: 484,981.
Average farm net worth;
Established farmers: $723,075;
Beginning farmers: $384,755.
Under 55 years of age;
Established farmers: 37%;
Beginning farmers: 70%.
55 years of age or older;
Established farmers: 63%;
Beginning farmers: 30%.
Nonwhite or Hispanic;
Established farmers: 6%;
Beginning farmers: 8%.
White, non-Hispanic;
Established farmers: 94%;
Beginning farmers: 92%.
Male;
Established farmers: 91%;
Beginning farmers: 87%.
Female;
Established farmers: 9%;
Beginning farmers: 13%.
Source: D. Newton and M. Ahearn. USDA's Farm Definition and the
Targeting of Underserved Farmers. Presented at the Professional
Agricultural Workers Conference, December 2006. Tuskegee, Alabama.
Note: Beginning farmer data were calculated by analyzing data about
principal farm operators from the 2005 Agricultural Resource Management
Survey.
[End of table]
ERS economists told us they are supplementing this work with additional
analysis to provide insight into the characteristics of beginning
farmers. This information will include the location of beginning
farmers across the United States, the types of production they engage
in, the size of their operations, their level of participation in
government programs, as well as whether they rent or own land. They are
also analyzing differences between beginning farmers actively engaged
in farming and those who are "hobby" farmers. For example, ERS
economists found that roughly one-third of beginning farms in 2005 had
no agricultural output and were likely operated by individuals
interested in a rural residential lifestyle.[Footnote 19]
In addition to ERS's efforts, FSA has recently begun to analyze the
financial characteristics and types of production of beginning farmers
with FSA loans, as table 8 illustrates. This information shows, for
example, that most beginning farmers with FSA direct loans are involved
in livestock, corn, or soybean production.
Table 8: Distribution of Beginning Farmer Borrowers by Type of
Production for FSA Direct Loans Made in Fiscal Years 2005-2006:
Type of production: Beef cattle;
Farm ownership loans: 38.2%;
Operating loans: 37.8%.
Type of production: Corn, soybean;
Farm ownership loans: 19.5;
Operating loans: 11.2.
Type of production: General row crops;
Farm ownership loans: 11.4;
Operating loans: 10.7.
Type of production: Dairy;
Farm ownership loans: 10.1;
Operating loans: 17.2.
Type of production: Other crops;
Farm ownership loans: 4.9;
Operating loans: 6.5.
Type of production: Wheat;
Farm ownership loans: 5.6;
Operating loans: 3.0.
Type of production: Other livestock;
Farm ownership loans: 3.0;
Operating loans: 2.6.
Type of production: Cotton;
Farm ownership loans: .9;
Operating loans: 4.4.
Type of production: Fruit, nut, nursery;
Farm ownership loans: 1.9;
Operating loans: 2.4.
Type of production: Vegetable and potato;
Farm ownership loans: 1.6;
Operating loans: 2.6.
Type of production: Poultry and eggs;
Farm ownership loans: 2.9;
Operating loans: 1.7.
Type of production: Total;
Farm ownership loans: 100%;
Operating loans: 100%[A].
Source: FSA.
Note: According to FSA, for the purposes of this analysis general row
crops included rice, peanuts, grain sorghum, and diversified crop
farms. Other crops included hay, sugar, tobacco, and grass seed. Other
livestock included hogs, sheep, goats, horses, bees, alpacas, and
aquaculture.
[A] Totals do not add to 100 percent due to rounding.
[End of table]
This type of information should help FSA determine the extent to which
the characteristics of its beginning farmer borrowers reflect those of
beginning farmers as a whole. Furthermore, FSA officials we spoke with
said that as additional data are entered into the agency's new
centralized system for monitoring borrowers, it will be possible to
conduct long-term analyses about these borrowers, including beginning
farmers. This information will be valuable for understanding how
farming operations change as a result of FSA assistance, including
whether they expand and survive.
Finally, USDA's analysis of beginning farmer characteristics
supplements its work relating to changes in the age of farmers and the
number of farms.[Footnote 20] In 2007, USDA economists reported that
the number of older farmers is increasing and the number of young
farmers is declining. Younger farmers enter the business at a very slow
rate, a fact that tends to increase the average age of farmers as a
whole. Agricultural census data show that the average of age of
principal farm operators in 2002 was 55, an increase from 50 years of
age in 1978. Nevertheless, the number of farms has been relatively
stable in recent years according to USDA because of a near balance in
the overall rate of farm entry and exit.[Footnote 21] Moreover, USDA
maintains that changes in the age composition of the farm population
and its overall size will not likely impair the nation's food security,
since increases in labor productivity have been rapid enough to
maintain farm output.
Conclusions:
Over the past two decades, heightened focus on beginning farmers by
Congress and the agricultural community has led to USDA programs and
incentives that provide much financial assistance to this group.
However, despite the billions of dollars provided to beginning farmers
through loans and conservation assistance, USDA has not yet
demonstrated the effectiveness of its assistance to beginning farmers
by showing what its expenditures are accomplishing. Although there are
many reasons for helping beginning farmers, USDA has not developed a
crosscutting, departmental strategic goal for its beginning farmer
efforts to describe its expected accomplishments. FSA provides
information about the dollars it directs to beginning farmers, but this
information does not provide adequate direction for the department's
efforts or speak to the outcomes of its beginning farmer assistance.
Without a crosscutting, departmental strategic performance goal, USDA
will be unable to determine the effectiveness of its current beginning
farmer efforts and the need for changes in this assistance.
Furthermore, the department's recent work to develop information about
the characteristics of beginning farmers should help it define the
outcomes it wants to achieve and develop a related crosscutting,
departmental strategic goal. Additional baseline data about beginning
farmer characteristics that provide insight into who beginning farmers
are, which ones USDA assists, and how beginning farmer operations in
agriculture change over time should (1) help USDA track the changes
within this group, (2) provide a basis for more in-depth analyses about
the effects of existing programs on beginning farmers, and (3) help
identify the need for new forms of assistance. Furthermore, continued
analysis of how beginning farmer policies affect farm entry and the age
of farmers could provide insight into program effectiveness.
Recommendations for Executive Action:
To better ensure USDA can provide Congress and the public with
information on the effectiveness of assistance to beginning farmers, we
are recommending that the Secretary of Agriculture develop a
crosscutting, departmental strategic beginning farmer performance goal
that identifies the desired outcomes of USDA's beginning farmer
assistance and that links to related agency goals. We also recommend
that USDA track progress toward achieving these goals.
Agency Comments and Our Evaluation:
We provided USDA with a draft of this report for review and comment. In
a letter dated September 12, 2007, we received formal comments from the
Secretary of Agriculture. These comments are reprinted in appendix VI.
We also received oral technical comments, which we incorporated into
the report, as appropriate.
USDA stated that it generally agreed with our report and
recommendations. In particular, USDA explained that it would be able to
develop more focused performance measures once the 2007 Farm Bill is
complete. However, USDA did not specifically state whether it would
develop a crosscutting, departmental strategic goal as we recommended.
In addition, USDA stated that its departmental and agency strategic
plans, taken together, provide a comprehensive strategy to ensure that
its programs to assist beginning farmers are achieving stated
objectives and goals. We disagree, since the goals in USDA's plans do
not provide adequate direction and focus for the department's multiple
beginning farmer efforts. For example, the departmental goal in USDA's
Strategic Plan to "Enhance the Competitiveness and Sustainability of
Rural and Farm Economies" is related to agricultural producers and
rural communities broadly; it is not specific to beginning farmers. A
performance goal within that plan to increase the percentage of loans
made to beginning farmers, racial and ethnic minority farmers, and
women farmers is not crosscutting in nature and relates only to FSA's
loan programs.
Moreover, USDA's comments do not indicate a full appreciation of the
efforts needed to implement our recommendation. For example, USDA did
not discuss the need for further analysis of (1) beginning farmer
characteristics, (2) gaps in beginning farmer assistance, and (3) the
effects of beginning farmer policies on farm entry and the age of
farmers. Such analysis could help USDA define the outcomes it expects
its beginning farmer assistance to achieve and develop a crosscutting,
departmental strategic goal to measure success. Furthermore, USDA did
not directly respond to our conclusion that it has not demonstrated
what has been accomplished by the billions of dollars of assistance to
beginning farmers. In light of the federal government's large and
growing structural deficits, GAO has stated that agencies must link
resources and activities to results. While USDA has taken the first
steps in tracking the numbers of farmers it assists, a crosscutting
strategic goal can help ensure its programs are mutually reinforcing in
their support of beginning farmers.
USDA also stated that FSA has virtually no discretion in setting the
definition of a qualified beginning farmer and rancher. However, we
believe that if USDA determines that consistency between FSA's and
NRCS's programmatic definitions would better ensure that beginning
farmer dollars work toward a common purpose, it should consider what
changes are needed and how best to effect those changes. If USDA finds
the changes in definitions require legislative action to achieve
consistency across programs or focus efforts on particular outcomes, it
should provide its analysis to Congress for consideration.
Finally, USDA provided examples of RMA partnership programs that
provided higher scores to applicants partnering with organizations that
help beginning farmers and other underserved producers. Although the
partnership programs direct risk management assistance to a broad class
of producers rather than specifically to beginning farmers, we
clarified the language in our report to acknowledge how the application
scoring process can benefit beginning farmers. Our report also
identifies examples of projects designed to help beginning farmers and
other underserved producers.
As agreed with your staff, unless you publicly announce the contents of
this report earlier, we plan no further distribution until 30 days from
the report date. At that time, we will send copies of this report to
interested congressional committees and the Secretary of Agriculture.
We will also make copies available to others upon request. In addition,
this report will be available at no charge on the GAO Web site at
[hyperlink, http://www.gao.gov].
If you or your staff have any questions about this report or need
additional information, please contact me at (202) 512-3841 or
shamesl@gao.gov. Contact points for our Offices of Congressional
Relations and of Public Affairs may be found on the last page of this
report. Key contributors to this report are listed in appendix VII.
Sincerely yours,
Signed by:
Lisa Shames:
Director, Natural Resources and Environment:
[End of section]
Appendix I: Scope and Methodology:
At the request of the Chairman of the Senate Committee on Agriculture,
Nutrition, and Forestry, we examined U.S. Department of Agriculture
(USDA) support to beginning farmers and ranchers. Our objectives were
to (1) identify the key steps USDA has taken to help beginning farmers
and (2) assess USDA's actions to measure the effectiveness of these
steps.
To identify USDA's key steps to assist beginning farmers, we reviewed
documentation describing the purpose and extent of USDA assistance to
this group. We focused on departmental efforts to assist beginning
farmers, as well as efforts by individual agencies such as the Farm
Service Agency (FSA) and Natural Resources Conservation Service (NRCS).
We also reviewed legislation authorizing assistance to beginning
farmers, such as the Food, Agriculture, Conservation, and Trade Act of
1990; the Agricultural Credit Improvement Act of 1992; and the Farm
Security and Rural Investment Act of 2002. To refine our understanding
of the amount of assistance provided through beginning farmer programs,
we also spoke with FSA and NRCS officials who manage programs that
assist beginning farmers. Specifically, we spoke with officials from
FSA's loan making and servicing divisions, as well as the agency's
Economic and Policy Analysis staff. We spoke with NRCS officials who
administer the Environmental Quality Incentives Program (EQIP) and
Conservation Security Program (CSP), as well as a representative from
the Resource Conservation and Development and Rural Lands Division. In
addition, to identify other programs that may assist beginning farmers
either directly or indirectly, we spoke with officials representing the
Cooperative State Research, Education, and Extension Service (CSREES);
Risk Management Agency (RMA); and the Agricultural Marketing Service
(AMS). We reviewed data these agencies provided about the level of
assistance to beginning farmers, including the number of loans and
conservation dollars approved. We also contacted small and beginning
farmer coordinators and the Co-Executive Directors of the Small Farms
and Beginning Farmers and Ranchers Council to discuss the strengths and
limitations of departmental assistance to beginning farmers.
To assess USDA's actions to measure the effectiveness of steps taken to
assist beginning farmers, we reviewed USDA's and agency strategic plans
and USDA's Performance and Accountability Report. We also reviewed
reports on farm entry and exit, the characteristics of beginning
farmers, and the effectiveness of credit programs. In addition, we
spoke with agency officials from FSA's Farm Loan Program and an
official from NRCS's Strategic and Performance Planning Division. These
officials described agency efforts taken to measure the effectiveness
of USDA's efforts to serve beginning farmers and data used to monitor
program performance. Last, we spoke with Economic Research Service
(ERS) and National Agricultural Statistics Service (NASS) officials
about data available regarding the characteristics of beginning farmers
and future directions for their research.
To understand the challenges beginning farmers face, we spoke with
representatives from the Advisory Committee on Beginning Farmers and
Ranchers. The Advisory Committee was established by USDA in 1998 to
provide advice to the Secretary of Agriculture about methods of
creating new farming and ranching opportunities, among other things.
Members interviewed included those representing academia, cooperative
extension programs, state government, and advocacy groups. On the basis
of discussions with members of the Advisory Committee, we identified
and interviewed other stakeholders, also representing academia,
cooperative extension programs, state government, and advocacy groups.
These interviews provided insight into USDA assistance to beginning
farmers and potential areas for change and included such groups as the
American Farm Bureau Federation, California FarmLink, Cornell
Cooperative Extension, Iowa State University's Beginning Farmer Center,
and the Montana Department of Agriculture, among others. We also
reviewed relevant policy papers and spoke with representatives from
such organizations as the Center for Rural Affairs and the Sustainable
Agriculture Coalition to familiarize ourselves with their
recommendations for beginning farmer policy changes.
Our work was performed between September 2006 and August 2007 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: FSA Loans to Beginning Farmers by State and Loan Type,
Fiscal Year 2006:
Table: FSA Loans to Beginning Farmers by State and Loan Type, Fiscal
Year 2006:
Dollars in millions.
State: Alabama;
Direct operating loans: Number of loans: 51;
Direct operating loans: Total amount of loans: $1.8;
Guaranteed operating loans: Number of loans: 6;
Guaranteed operating loans: Total amount of loans: $0.3;
Direct farm ownership loans: Number of loans: 6;
Direct farm ownership loans: Total amount of loans: $0.4;
Guaranteed farm ownership loans: Number of loans: 32;
Guaranteed farm ownership loans: Total amount of loans: $15.0;
Total loans: Number of loans: 95;
Total loans: Total amount of loans[A]: $17.6.
State: Alaska;
Direct operating loans: Number of loans: 2;
Direct operating loans: Total amount of loans: 0.1;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 0;
Direct farm ownership loans: Total amount of loans: 0.0;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 2;
Total loans: Total amount of loans[A]: 0.1.
State: Arizona;
Direct operating loans: Number of loans: 15;
Direct operating loans: Total amount of loans: 1.0;
Guaranteed operating loans: Number of loans: 3;
Guaranteed operating loans: Total amount of loans: 0.2;
Direct farm ownership loans: Number of loans: 2;
Direct farm ownership loans: Total amount of loans: 0.4;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 20;
Total loans: Total amount of loans[A]: 1.6.
State: Arkansas;
Direct operating loans: Number of loans: 393;
Direct operating loans: Total amount of loans: 26.4;
Guaranteed operating loans: Number of loans: 178;
Guaranteed operating loans: Total amount of loans: 28.5;
Direct farm ownership loans: Number of loans: 38;
Direct farm ownership loans: Total amount of loans: 5.2;
Guaranteed farm ownership loans: Number of loans: 105;
Guaranteed farm ownership loans: Total amount of loans: 44.3;
Total loans: Number of loans: 714;
Total loans: Total amount of loans[A]: 104.4.
State: California;
Direct operating loans: Number of loans: 59;
Direct operating loans: Total amount of loans: 4.7;
Guaranteed operating loans: Number of loans: 70;
Guaranteed operating loans: Total amount of loans: 16.1;
Direct farm ownership loans: Number of loans: 9;
Direct farm ownership loans: Total amount of loans: 1.5;
Guaranteed farm ownership loans: Number of loans: 15;
Guaranteed farm ownership loans: Total amount of loans: 5.2;
Total loans: Number of loans: 153;
Total loans: Total amount of loans[A]: 27.6.
State: Colorado;
Direct operating loans: Number of loans: 41;
Direct operating loans: Total amount of loans: 2.1;
Guaranteed operating loans: Number of loans: 16;
Guaranteed operating loans: Total amount of loans: 1.7;
Direct farm ownership loans: Number of loans: 15;
Direct farm ownership loans: Total amount of loans: 1.4;
Guaranteed farm ownership loans: Number of loans: 13;
Guaranteed farm ownership loans: Total amount of loans: 4.0;
Total loans: Number of loans: 85;
Total loans: Total amount of loans[A]: 9.2.
State: Connecticut;
Direct operating loans: Number of loans: 3;
Direct operating loans: Total amount of loans: 0.1;
Guaranteed operating loans: Number of loans: 2;
Guaranteed operating loans: Total amount of loans: 0.5;
Direct farm ownership loans: Number of loans: 0;
Direct farm ownership loans: Total amount of loans: 0.0;
Guaranteed farm ownership loans: Number of loans: 2;
Guaranteed farm ownership loans: Total amount of loans: 0.3;
Total loans: Number of loans: 7;
Total loans: Total amount of loans[A]: 0.9.
State: Delaware;
Direct operating loans: Number of loans: 1;
Direct operating loans: Total amount of loans: 0.1;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 3;
Direct farm ownership loans: Total amount of loans: 0.6;
Guaranteed farm ownership loans: Number of loans: 3;
Guaranteed farm ownership loans: Total amount of loans: 1.2;
Total loans: Number of loans: 7;
Total loans: Total amount of loans[A]: 1.9.
State: Florida;
Direct operating loans: Number of loans: 29;
Direct operating loans: Total amount of loans: 2.1;
Guaranteed operating loans: Number of loans: 10;
Guaranteed operating loans: Total amount of loans: 1.1;
Direct farm ownership loans: Number of loans: 4;
Direct farm ownership loans: Total amount of loans: 0.5;
Guaranteed farm ownership loans: Number of loans: 6;
Guaranteed farm ownership loans: Total amount of loans: 3.4;
Total loans: Number of loans: 49;
Total loans: Total amount of loans[A]: 7.1.
State: Georgia;
Direct operating loans: Number of loans: 164;
Direct operating loans: Total amount of loans: 11.8;
Guaranteed operating loans: Number of loans: 73;
Guaranteed operating loans: Total amount of loans: 10.5;
Direct farm ownership loans: Number of loans: 12;
Direct farm ownership loans: Total amount of loans: 1.4;
Guaranteed farm ownership loans: Number of loans: 35;
Guaranteed farm ownership loans: Total amount of loans: 19.2;
Total loans: Number of loans: 284;
Total loans: Total amount of loans[A]: 42.9.
State: Hawaii;
Direct operating loans: Number of loans: 25;
Direct operating loans: Total amount of loans: 0.4;
Guaranteed operating loans: Number of loans: 1;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 0;
Direct farm ownership loans: Total amount of loans: 0.0;
Guaranteed farm ownership loans: Number of loans: 1;
Guaranteed farm ownership loans: Total amount of loans: 0.2;
Total loans: Number of loans: 27;
Total loans: Total amount of loans[A]: 0.7.
State: Idaho;
Direct operating loans: Number of loans: 109;
Direct operating loans: Total amount of loans: 7.0;
Guaranteed operating loans: Number of loans: 48;
Guaranteed operating loans: Total amount of loans: 7.0;
Direct farm ownership loans: Number of loans: 16;
Direct farm ownership loans: Total amount of loans: 2.4;
Guaranteed farm ownership loans: Number of loans: 13;
Guaranteed farm ownership loans: Total amount of loans: 2.1;
Total loans: Number of loans: 186;
Total loans: Total amount of loans[A]: 18.6.
State: Illinois;
Direct operating loans: Number of loans: 103;
Direct operating loans: Total amount of loans: 5.8;
Guaranteed operating loans: Number of loans: 59;
Guaranteed operating loans: Total amount of loans: 6.1;
Direct farm ownership loans: Number of loans: 73;
Direct farm ownership loans: Total amount of loans: 7.1;
Guaranteed farm ownership loans: Number of loans: 18;
Guaranteed farm ownership loans: Total amount of loans: 2.5;
Total loans: Number of loans: 253;
Total loans: Total amount of loans[A]: 21.4.
State: Indiana;
Direct operating loans: Number of loans: 42;
Direct operating loans: Total amount of loans: 2.0;
Guaranteed operating loans: Number of loans: 20;
Guaranteed operating loans: Total amount of loans: 1.6;
Direct farm ownership loans: Number of loans: 61;
Direct farm ownership loans: Total amount of loans: 8.8;
Guaranteed farm ownership loans: Number of loans: 33;
Guaranteed farm ownership loans: Total amount of loans: 10.2;
Total loans: Number of loans: 156;
Total loans: Total amount of loans[A]: 22.7.
State: Iowa;
Direct operating loans: Number of loans: 492;
Direct operating loans: Total amount of loans: 19.6;
Guaranteed operating loans: Number of loans: 102;
Guaranteed operating loans: Total amount of loans: 15.3;
Direct farm ownership loans: Number of loans: 200;
Direct farm ownership loans: Total amount of loans: 26.6;
Guaranteed farm ownership loans: Number of loans: 42;
Guaranteed farm ownership loans: Total amount of loans: 11.1;
Total loans: Number of loans: 836;
Total loans: Total amount of loans[A]: 72.6.
State: Kansas;
Direct operating loans: Number of loans: 162;
Direct operating loans: Total amount of loans: 8.5;
Guaranteed operating loans: Number of loans: 27;
Guaranteed operating loans: Total amount of loans: 2.6;
Direct farm ownership loans: Number of loans: 123;
Direct farm ownership loans: Total amount of loans: 13.8;
Guaranteed farm ownership loans: Number of loans: 18;
Guaranteed farm ownership loans: Total amount of loans: 2.1;
Total loans: Number of loans: 330;
Total loans: Total amount of loans[A]: 27.0.
State: Kentucky;
Direct operating loans: Number of loans: 308;
Direct operating loans: Total amount of loans: 8.9;
Guaranteed operating loans: Number of loans: 41;
Guaranteed operating loans: Total amount of loans: 5.6;
Direct farm ownership loans: Number of loans: 59;
Direct farm ownership loans: Total amount of loans: 6.8;
Guaranteed farm ownership loans: Number of loans: 32;
Guaranteed farm ownership loans: Total amount of loans: 8.1;
Total loans: Number of loans: 440;
Total loans: Total amount of loans[A]: 29.4.
State: Louisiana;
Direct operating loans: Number of loans: 126;
Direct operating loans: Total amount of loans: 8.8;
Guaranteed operating loans: Number of loans: 52;
Guaranteed operating loans: Total amount of loans: 10.1;
Direct farm ownership loans: Number of loans: 3;
Direct farm ownership loans: Total amount of loans: 0.6;
Guaranteed farm ownership loans: Number of loans: 8;
Guaranteed farm ownership loans: Total amount of loans: 3.0;
Total loans: Number of loans: 189;
Total loans: Total amount of loans[A]: 22.5.
State: Maine;
Direct operating loans: Number of loans: 34;
Direct operating loans: Total amount of loans: 1.6;
Guaranteed operating loans: Number of loans: 6;
Guaranteed operating loans: Total amount of loans: 0.6;
Direct farm ownership loans: Number of loans: 2;
Direct farm ownership loans: Total amount of loans: 0.4;
Guaranteed farm ownership loans: Number of loans: 2;
Guaranteed farm ownership loans: Total amount of loans: 0.3;
Total loans: Number of loans: 44;
Total loans: Total amount of loans[A]: 2.9.
State: Maryland;
Direct operating loans: Number of loans: 2;
Direct operating loans: Total amount of loans: 0.1;
Guaranteed operating loans: Number of loans: 4;
Guaranteed operating loans: Total amount of loans: 0.3;
Direct farm ownership loans: Number of loans: 1;
Direct farm ownership loans: Total amount of loans: 0.2;
Guaranteed farm ownership loans: Number of loans: 12;
Guaranteed farm ownership loans: Total amount of loans: 2.9;
Total loans: Number of loans: 19;
Total loans: Total amount of loans[A]: 3.6.
State: Massachusetts;
Direct operating loans: Number of loans: 19;
Direct operating loans: Total amount of loans: 0.8;
Guaranteed operating loans: Number of loans: 5;
Guaranteed operating loans: Total amount of loans: 1.0;
Direct farm ownership loans: Number of loans: 3;
Direct farm ownership loans: Total amount of loans: 0.3;
Guaranteed farm ownership loans: Number of loans: 2;
Guaranteed farm ownership loans: Total amount of loans: 1.3;
Total loans: Number of loans: 29;
Total loans: Total amount of loans[A]: 3.3.
State: Michigan;
Direct operating loans: Number of loans: 117;
Direct operating loans: Total amount of loans: 7.1;
Guaranteed operating loans: Number of loans: 31;
Guaranteed operating loans: Total amount of loans: 3.4;
Direct farm ownership loans: Number of loans: 51;
Direct farm ownership loans: Total amount of loans: 6.3;
Guaranteed farm ownership loans: Number of loans: 25;
Guaranteed farm ownership loans: Total amount of loans: 5.0;
Total loans: Number of loans: 224;
Total loans: Total amount of loans[A]: 21.9.
State: Minnesota;
Direct operating loans: Number of loans: 437;
Direct operating loans: Total amount of loans: 23.4;
Guaranteed operating loans: Number of loans: 115;
Guaranteed operating loans: Total amount of loans: 14.2;
Direct farm ownership loans: Number of loans: 106;
Direct farm ownership loans: Total amount of loans: 16.1;
Guaranteed farm ownership loans: Number of loans: 23;
Guaranteed farm ownership loans: Total amount of loans: 4.9;
Total loans: Number of loans: 681;
Total loans: Total amount of loans[A]: 58.5.
State: Mississippi;
Direct operating loans: Number of loans: 106;
Direct operating loans: Total amount of loans: 6.3;
Guaranteed operating loans: Number of loans: 23;
Guaranteed operating loans: Total amount of loans: 5.6;
Direct farm ownership loans: Number of loans: 5;
Direct farm ownership loans: Total amount of loans: 0.4;
Guaranteed farm ownership loans: Number of loans: 4;
Guaranteed farm ownership loans: Total amount of loans: 2.9;
Total loans: Number of loans: 138;
Total loans: Total amount of loans[A]: 15.2.
State: Missouri;
Direct operating loans: Number of loans: 159;
Direct operating loans: Total amount of loans: 8.1;
Guaranteed operating loans: Number of loans: 60;
Guaranteed operating loans: Total amount of loans: 8.1;
Direct farm ownership loans: Number of loans: 83;
Direct farm ownership loans: Total amount of loans: 10.1;
Guaranteed farm ownership loans: Number of loans: 65;
Guaranteed farm ownership loans: Total amount of loans: 19.0;
Total loans: Number of loans: 367;
Total loans: Total amount of loans[A]: 45.3.
State: Montana;
Direct operating loans: Number of loans: 43;
Direct operating loans: Total amount of loans: 2.7;
Guaranteed operating loans: Number of loans: 29;
Guaranteed operating loans: Total amount of loans: 2.2;
Direct farm ownership loans: Number of loans: 14;
Direct farm ownership loans: Total amount of loans: 2.3;
Guaranteed farm ownership loans: Number of loans: 14;
Guaranteed farm ownership loans: Total amount of loans: 2.5;
Total loans: Number of loans: 100;
Total loans: Total amount of loans[A]: 9.7.
State: Nebraska;
Direct operating loans: Number of loans: 526;
Direct operating loans: Total amount of loans: 25.4;
Guaranteed operating loans: Number of loans: 53;
Guaranteed operating loans: Total amount of loans: 8.5;
Direct farm ownership loans: Number of loans: 138;
Direct farm ownership loans: Total amount of loans: 17.9;
Guaranteed farm ownership loans: Number of loans: 28;
Guaranteed farm ownership loans: Total amount of loans: 6.3;
Total loans: Number of loans: 745;
Total loans: Total amount of loans[A]: 58.1.
State: Nevada;
Direct operating loans: Number of loans: 14;
Direct operating loans: Total amount of loans: 1.1;
Guaranteed operating loans: Number of loans: 1;
Guaranteed operating loans: Total amount of loans: 0.1;
Direct farm ownership loans: Number of loans: 0;
Direct farm ownership loans: Total amount of loans: 0.0;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 15;
Total loans: Total amount of loans[A]: 1.2.
State: New Hampshire;
Direct operating loans: Number of loans: 24;
Direct operating loans: Total amount of loans: 0.8;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 3;
Direct farm ownership loans: Total amount of loans: 0.2;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 27;
Total loans: Total amount of loans[A]: 1.0.
State: New Jersey;
Direct operating loans: Number of loans: 23;
Direct operating loans: Total amount of loans: 1.1;
Guaranteed operating loans: Number of loans: 2;
Guaranteed operating loans: Total amount of loans: 0.2;
Direct farm ownership loans: Number of loans: 2;
Direct farm ownership loans: Total amount of loans: 0.4;
Guaranteed farm ownership loans: Number of loans: 1;
Guaranteed farm ownership loans: Total amount of loans: 0.9;
Total loans: Number of loans: 28;
Total loans: Total amount of loans[A]: 2.5.
State: New Mexico;
Direct operating loans: Number of loans: 15;
Direct operating loans: Total amount of loans: 0.9;
Guaranteed operating loans: Number of loans: 9;
Guaranteed operating loans: Total amount of loans: 1.6;
Direct farm ownership loans: Number of loans: 4;
Direct farm ownership loans: Total amount of loans: 0.4;
Guaranteed farm ownership loans: Number of loans: 4;
Guaranteed farm ownership loans: Total amount of loans: 0.4;
Total loans: Number of loans: 32;
Total loans: Total amount of loans[A]: 3.3.
State: New York;
Direct operating loans: Number of loans: 118;
Direct operating loans: Total amount of loans: 7.0;
Guaranteed operating loans: Number of loans: 42;
Guaranteed operating loans: Total amount of loans: 3.2;
Direct farm ownership loans: Number of loans: 27;
Direct farm ownership loans: Total amount of loans: 3.3;
Guaranteed farm ownership loans: Number of loans: 10;
Guaranteed farm ownership loans: Total amount of loans: 1.7;
Total loans: Number of loans: 197;
Total loans: Total amount of loans[A]: 15.2.
State: North Carolina;
Direct operating loans: Number of loans: 78;
Direct operating loans: Total amount of loans: 3.9;
Guaranteed operating loans: Number of loans: 39;
Guaranteed operating loans: Total amount of loans: 5.7;
Direct farm ownership loans: Number of loans: 9;
Direct farm ownership loans: Total amount of loans: 1.1;
Guaranteed farm ownership loans: Number of loans: 40;
Guaranteed farm ownership loans: Total amount of loans: 12.6;
Total loans: Number of loans: 166;
Total loans: Total amount of loans[A]: 23.3.
State: North Dakota;
Direct operating loans: Number of loans: 206;
Direct operating loans: Total amount of loans: 13.4;
Guaranteed operating loans: Number of loans: 94;
Guaranteed operating loans: Total amount of loans: 17.2;
Direct farm ownership loans: Number of loans: 51;
Direct farm ownership loans: Total amount of loans: 5.6;
Guaranteed farm ownership loans: Number of loans: 12;
Guaranteed farm ownership loans: Total amount of loans: 1.8;
Total loans: Number of loans: 363;
Total loans: Total amount of loans[A]: 38.0.
State: Ohio;
Direct operating loans: Number of loans: 42;
Direct operating loans: Total amount of loans: 1.3;
Guaranteed operating loans: Number of loans: 33;
Guaranteed operating loans: Total amount of loans: 2.9;
Direct farm ownership loans: Number of loans: 42;
Direct farm ownership loans: Total amount of loans: 4.7;
Guaranteed farm ownership loans: Number of loans: 66;
Guaranteed farm ownership loans: Total amount of loans: 10.2;
Total loans: Number of loans: 183;
Total loans: Total amount of loans[A]: 19.2.
State: Oklahoma;
Direct operating loans: Number of loans: 223;
Direct operating loans: Total amount of loans: 9.0;
Guaranteed operating loans: Number of loans: 38;
Guaranteed operating loans: Total amount of loans: 7.8;
Direct farm ownership loans: Number of loans: 110;
Direct farm ownership loans: Total amount of loans: 12.5;
Guaranteed farm ownership loans: Number of loans: 45;
Guaranteed farm ownership loans: Total amount of loans: 13.7;
Total loans: Number of loans: 416;
Total loans: Total amount of loans[A]: 43.0.
State: Oregon;
Direct operating loans: Number of loans: 124;
Direct operating loans: Total amount of loans: 5.6;
Guaranteed operating loans: Number of loans: 29;
Guaranteed operating loans: Total amount of loans: 4.1;
Direct farm ownership loans: Number of loans: 9;
Direct farm ownership loans: Total amount of loans: 1.7;
Guaranteed farm ownership loans: Number of loans: 5;
Guaranteed farm ownership loans: Total amount of loans: 1.7;
Total loans: Number of loans: 167;
Total loans: Total amount of loans[A]: 13.0.
State: Pennsylvania;
Direct operating loans: Number of loans: 229;
Direct operating loans: Total amount of loans: 12.7;
Guaranteed operating loans: Number of loans: 18;
Guaranteed operating loans: Total amount of loans: 1.8;
Direct farm ownership loans: Number of loans: 34;
Direct farm ownership loans: Total amount of loans: 5.7;
Guaranteed farm ownership loans: Number of loans: 17;
Guaranteed farm ownership loans: Total amount of loans: 5.0;
Total loans: Number of loans: 298;
Total loans: Total amount of loans[A]: 25.2.
State: Rhode Island;
Direct operating loans: Number of loans: 3;
Direct operating loans: Total amount of loans: 0.0;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 0;
Direct farm ownership loans: Total amount of loans: 0.0;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 3;
Total loans: Total amount of loans[A]: 0.0.
State: South Carolina;
Direct operating loans: Number of loans: 129;
Direct operating loans: Total amount of loans: 8.9;
Guaranteed operating loans: Number of loans: 15;
Guaranteed operating loans: Total amount of loans: 3.7;
Direct farm ownership loans: Number of loans: 22;
Direct farm ownership loans: Total amount of loans: 3.0;
Guaranteed farm ownership loans: Number of loans: 46;
Guaranteed farm ownership loans: Total amount of loans: 18.6;
Total loans: Number of loans: 212;
Total loans: Total amount of loans[A]: 34.3.
State: South Dakota;
Direct operating loans: Number of loans: 368;
Direct operating loans: Total amount of loans: 19.3;
Guaranteed operating loans: Number of loans: 57;
Guaranteed operating loans: Total amount of loans: 8.1;
Direct farm ownership loans: Number of loans: 80;
Direct farm ownership loans: Total amount of loans: 10.7;
Guaranteed farm ownership loans: Number of loans: 16;
Guaranteed farm ownership loans: Total amount of loans: 4.5;
Total loans: Number of loans: 521;
Total loans: Total amount of loans[A]: 42.6.
State: Tennessee;
Direct operating loans: Number of loans: 76;
Direct operating loans: Total amount of loans: 4.4;
Guaranteed operating loans: Number of loans: 23;
Guaranteed operating loans: Total amount of loans: 5.2;
Direct farm ownership loans: Number of loans: 21;
Direct farm ownership loans: Total amount of loans: 2.9;
Guaranteed farm ownership loans: Number of loans: 10;
Guaranteed farm ownership loans: Total amount of loans: 3.9;
Total loans: Number of loans: 130;
Total loans: Total amount of loans[A]: 16.4.
State: Texas;
Direct operating loans: Number of loans: 265;
Direct operating loans: Total amount of loans: 15.5;
Guaranteed operating loans: Number of loans: 70;
Guaranteed operating loans: Total amount of loans: 13.8;
Direct farm ownership loans: Number of loans: 51;
Direct farm ownership loans: Total amount of loans: 7.1;
Guaranteed farm ownership loans: Number of loans: 16;
Guaranteed farm ownership loans: Total amount of loans: 6.7;
Total loans: Number of loans: 402;
Total loans: Total amount of loans[A]: 43.1.
State: Utah;
Direct operating loans: Number of loans: 110;
Direct operating loans: Total amount of loans: 5.8;
Guaranteed operating loans: Number of loans: 5;
Guaranteed operating loans: Total amount of loans: 0.5;
Direct farm ownership loans: Number of loans: 20;
Direct farm ownership loans: Total amount of loans: 2.4;
Guaranteed farm ownership loans: Number of loans: 11;
Guaranteed farm ownership loans: Total amount of loans: 1.9;
Total loans: Number of loans: 146;
Total loans: Total amount of loans[A]: 10.7.
State: Vermont;
Direct operating loans: Number of loans: 63;
Direct operating loans: Total amount of loans: 3.0;
Guaranteed operating loans: Number of loans: 7;
Guaranteed operating loans: Total amount of loans: 1.6;
Direct farm ownership loans: Number of loans: 2;
Direct farm ownership loans: Total amount of loans: 0.3;
Guaranteed farm ownership loans: Number of loans: 5;
Guaranteed farm ownership loans: Total amount of loans: 1.0;
Total loans: Number of loans: 77;
Total loans: Total amount of loans[A]: 5.9.
State: Virginia;
Direct operating loans: Number of loans: 24;
Direct operating loans: Total amount of loans: 1.2;
Guaranteed operating loans: Number of loans: 11;
Guaranteed operating loans: Total amount of loans: 1.4;
Direct farm ownership loans: Number of loans: 9;
Direct farm ownership loans: Total amount of loans: 1.2;
Guaranteed farm ownership loans: Number of loans: 10;
Guaranteed farm ownership loans: Total amount of loans: 3.0;
Total loans: Number of loans: 54;
Total loans: Total amount of loans[A]: 6.8.
State: Washington;
Direct operating loans: Number of loans: 86;
Direct operating loans: Total amount of loans: 6.0;
Guaranteed operating loans: Number of loans: 37;
Guaranteed operating loans: Total amount of loans: 4.9;
Direct farm ownership loans: Number of loans: 10;
Direct farm ownership loans: Total amount of loans: 1.6;
Guaranteed farm ownership loans: Number of loans: 8;
Guaranteed farm ownership loans: Total amount of loans: 2.1;
Total loans: Number of loans: 141;
Total loans: Total amount of loans[A]: 14.6.
State: West Virginia;
Direct operating loans: Number of loans: 91;
Direct operating loans: Total amount of loans: 2.5;
Guaranteed operating loans: Number of loans: 1;
Guaranteed operating loans: Total amount of loans: 0.1;
Direct farm ownership loans: Number of loans: 8;
Direct farm ownership loans: Total amount of loans: 1.1;
Guaranteed farm ownership loans: Number of loans: 2;
Guaranteed farm ownership loans: Total amount of loans: 0.3;
Total loans: Number of loans: 102;
Total loans: Total amount of loans[A]: 4.1.
State: Wisconsin;
Direct operating loans: Number of loans: 527;
Direct operating loans: Total amount of loans: 30.5;
Guaranteed operating loans: Number of loans: 84;
Guaranteed operating loans: Total amount of loans: 12.0;
Direct farm ownership loans: Number of loans: 107;
Direct farm ownership loans: Total amount of loans: 16.5;
Guaranteed farm ownership loans: Number of loans: 45;
Guaranteed farm ownership loans: Total amount of loans: 10.4;
Total loans: Number of loans: 763;
Total loans: Total amount of loans[A]: 69.4.
State: Wyoming;
Direct operating loans: Number of loans: 20;
Direct operating loans: Total amount of loans: 1.0;
Guaranteed operating loans: Number of loans: 4;
Guaranteed operating loans: Total amount of loans: 0.5;
Direct farm ownership loans: Number of loans: 8;
Direct farm ownership loans: Total amount of loans: 1.2;
Guaranteed farm ownership loans: Number of loans: 2;
Guaranteed farm ownership loans: Total amount of loans: 0.3;
Total loans: Number of loans: 34;
Total loans: Total amount of loans[A]: 3.0.
State: Puerto Rico;
Direct operating loans: Number of loans: 4;
Direct operating loans: Total amount of loans: 0.1;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 7;
Direct farm ownership loans: Total amount of loans: 0.4;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 11;
Total loans: Total amount of loans[A]: 0.5.
State: Virgin Islands;
Direct operating loans: Number of loans: 2;
Direct operating loans: Total amount of loans: 0.0;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 0;
Direct farm ownership loans: Total amount of loans: 0.0;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 2;
Total loans: Total amount of loans[A]: 0.0.
State: Western Pacific Territories;
Direct operating loans: Number of loans: 6;
Direct operating loans: Total amount of loans: 0.1;
Guaranteed operating loans: Number of loans: 0;
Guaranteed operating loans: Total amount of loans: 0.0;
Direct farm ownership loans: Number of loans: 1;
Direct farm ownership loans: Total amount of loans: 0.1;
Guaranteed farm ownership loans: Number of loans: 0;
Guaranteed farm ownership loans: Total amount of loans: 0.0;
Total loans: Number of loans: 7;
Total loans: Total amount of loans[A]: 0.1.
State: National total[A];
Direct operating loans: Number of loans: 6,438;
Direct operating loans: Total amount of loans: $341.8;
Guaranteed operating loans: Number of loans: 1,653;
Guaranteed operating loans: Total amount of loans: $247.5;
Direct farm ownership loans: Number of loans: 1,664;
Direct farm ownership loans: Total amount of loans: $215.4;
Guaranteed farm ownership loans: Number of loans: 922;
Guaranteed farm ownership loans: Total amount of loans: $278.1;
Total loans: Number of loans: 10,677;
Total loans: Total amount of loans[A]: $1,082.8.
Source: FSA.
[A] Dollar totals may not add due to rounding.
[End of table]
[End of section]
Appendix III: EQIP Financial Assistance Approved for Beginning Farmers
by State, Fiscal Year 2006:
[End of section]
Dollars in millions.
State: Alabama;
Contracts: 106;
Financial assistance: $1.4.
State: Alaska;
Contracts: 26;
Financial assistance: 1.3.
State: Arizona;
Contracts: 52;
Financial assistance: 4.6.
State: Arkansas;
Contracts: 72;
Financial assistance: 1.3.
State: California;
Contracts: 182;
Financial assistance: 8.4.
State: Colorado;
Contracts: 96;
Financial assistance: 2.8.
State: Connecticut;
Contracts: 23;
Financial assistance: 2.3.
Delaware;
Contracts: 25;
Financial assistance: 1.2.
State: Florida;
Contracts: 1;
Financial assistance: 0.
State: Georgia;
Contracts: 7;
Financial assistance: 0.1.
State: Hawaii;
Contracts: 32;
Financial assistance: 1.1.
State: Idaho;
Contracts: 56;
Financial assistance: 2.1.
State: Illinois;
Contracts: 5;
Financial assistance: 0.1.
State: Indiana;
Contracts: 38;
Financial assistance: 0.9.
State: Iowa;
Contracts: 65;
Financial assistance: 1.5.
State: Kansas;
Contracts: 87;
Financial assistance: 1.5.
State: Kentucky;
Contracts: 100;
Financial assistance: 1.0.
State: Louisiana;
Contracts: 182;
Financial assistance: 2.5.
State: Maine;
Contracts: 64;
Financial assistance: 1.4.
Maryland;
Contracts: 48;
Financial assistance: 0.6.
State: Massachusetts;
Contracts: 24;
Financial assistance: 0.5.
State: Michigan;
Contracts: 45;
Financial assistance: 2.3.
State: Minnesota;
Contracts: 11;
Financial assistance: 0.2.
State: Mississippi;
Contracts: 293;
Financial assistance: 2.0.
State: Missouri;
Contracts: 77;
Financial assistance: 1.6.
State: Montana;
Contracts: 88;
Financial assistance: 2.6.
State: Nebraska;
Contracts: 51;
Financial assistance: 1.4.
State: Nevada;
Contracts: 7;
Financial assistance: 0.8.
State: New Hampshire;
Contracts: 63;
Financial assistance: 1.9.
State: New Jersey;
Contracts: 30;
Financial assistance: 1.9.
State: New Mexico;
Contracts: 114;
Financial assistance: 3.2.
State: New York;
Contracts: 33;
Financial assistance: 0.8.
State: North Carolina;
Contracts: 148;
Financial assistance: 4.5.
State: North Dakota;
Contracts: 55;
Financial assistance: 2.6.
State: Ohio;
Contracts: 23;
Financial assistance: 0.2.
State: Oklahoma;
Contracts: 260;
Financial assistance: 3.2.
State: Oregon;
Contracts: 44;
Financial assistance: 1.6.
State: Pennsylvania;
Contracts: 48;
Financial assistance: 2.3.
State: Rhode Island;
Contracts: 30;
Financial assistance: 1.8.
State: South Carolina;
Contracts: 96;
Financial assistance: 1.7.
State: South Dakota;
Contracts: 31;
Financial assistance: 1.8.
State: Tennessee;
Contracts: 39;
Financial assistance: 0.7.
State: Texas;
Contracts: 107;
Financial assistance: 2.1.
State: Utah;
Contracts: 74;
Financial assistance: 3.4.
State: Vermont;
Contracts: 9;
Financial assistance: 0.4.
State: Virginia;
Contracts: 88;
Financial assistance: 3.1.
State: Washington;
Contracts: 42;
Financial assistance: 1.7.
State: West Virginia;
Contracts: 18;
Financial assistance: 0.2.
State: Wisconsin;
Contracts: 4;
Financial assistance: 0.1.
State: Wyoming;
Contracts: 26;
Financial assistance: 1.1.
State: Pacific Basin;
Contracts: 23;
Financial assistance: 0.7.
State: Puerto Rico;
Contracts: 109;
Financial assistance: 2.7.
National Total;
Contracts: 3,377;
Financial assistance: $91.1 .
[End of table]
Source: NRCS.
[End of section]
Appendix IV: USDA Small Farms and Beginning Farmers and Ranchers
Policy:
U.S. Department Of Agriculture
Washington, D.C. 20250:
Departmental Regulation:
Subject: Small Farms and Beginning Farmers and Ranchers Policy:
Number: 9700-001:
Date: August 3, 2006:
OPI: Office of the Chief Economist:
1. Purpose:
This regulation sets forth the policy of the United States Department
of Agriculture (USDA) with regard to the importance and role of small
farms, ranches, woodlots, and beginning farmers and ranchers (hereafter
referred to as small farms and beginning farmers and ranchers) to U.S.
agriculture and the establishment of strategies, systems, and a
Departmental framework for achieving and maintaining the viability of
small farms and beginning farmers and ranchers.
2. Special Instructions:
Departmental Regulation (DR) 9700-1, dated September 8, 1999 is
replaced by this revised regulation, which revises DR 9700-1 to include
beginning farmers and ranchers.
3. Background:
a. Small farms have been critical to American society throughout the
Nation's history. Today, as historically, the vast majority of all
farms ' in the United States are small. The viability and
sustainability of these farms is important to our Nation's economy, to
the wise stewardship of our biological and natural resources, and to
the leadership and social fabric of rural communities. Their economic
contribution is important to the Nation and is especially critical to
the thousands of rural communities where they pay taxes and to the
thousands of businesses they support.
b. Small farms play an important role in the U.S. agricultural sector.
The Economic Research Service (ERS) in its Farm Typology Group
Definition uses the definition of "small farm" developed by the
National Commission on Small Farms. The Commission used $250,000 in
gross sales as its cutoff between small and large farms in its report,
A Time to Act (U.S. Dept. Agr., Nat'l. Comm. on Small Farms, 1998),
released in January 1998. This definition was instituted in 1997 by the
Secretary of Agriculture to examine issues facing small farms. The
definition is generally accepted by Congress, researchers, land grant
institutions, the small farm community and others. In 2004, small farms
accounted for 92 percent of all farms and ranches, owned 71 percent of
the total productive assets in agriculture, operated 60 percent of all
land used in agricultural production, and accounted for 26 percent of
all agricultural receipts from crops and livestock. Small farms took
leadership in the development of organic production systems in the
United States. In the late 1990s, the organic and natural foods market
became the fastest growing sector of the U.S. food market.
c. Owning and operating a small farm represents an avenue to economic
independence and entrepreneurial achievement for many Americans from
all walks of life. Small farms owners and operators are a diverse group
of Americans, including American Indians or Alaska Natives, Asians,
Blacks or African Americans, Ethnic Europeans, Hispanic or Latino
Origin, Native Hawaiians or Other Pacific Islanders, Spanish, Whites,
women, persons 'with disabilities, and others.
d. Small farms are operated by resourceful agriculturalists, who
combine entrepreneurship, business skills, family labor, and knowledge
to produce food and fiber, and wood products consumed by millions of
Americans and people around the world. However, not all small family
farms are alike. As of 2004, the Economic Research Service (ERS)
identified four primary groups of small family farms, each with
different resources, goals, and contributions to the Nation's
agricultural production. These groups are: 1) Primary occupation farms,
which account for 25 percent of all U.S. farms and are operated by
farmers who farm as their primary occupation; 2) Limited resource
farms, which make up 9 percent of farms and have low household income
and gross sales less than $100,000; 3) Retirement farms, which account
for 16 percent of farms and are operated by individuals who identify
themselves as retired; and 4) Residential or lifestyle farms, which
constitute 40 percent of farms and are operated by people whose primary
occupation is something other than farming.
Limited resource, retirement, and residential or lifestyle farms
accounted for about 8 percent of the value of U.S. agricultural
production. Small farms where farming is the primary occupation
accounted for almost one fifth of production.
e. Due to Congressional concern over the increasing average age of
American farmers and ranchers, the Agricultural Credit Improvement Act
of 1992 (Act) required the Secretary to establish: (1) beginning farmer
loan programs; (2) Federal-State beginning farmer partnerships for the
purpose of providing joint financing to beginning farmers and ranchers;
and (3) an Advisory Committee on Beginning Farmers and Ranchers. The
Act also required that loan funds be targeted to beginning fanners and
ranchers.
In accordance with the Act, USDA implemented beginning farmer and
rancher loan programs in Fiscal Year (FY) 1994. Since then, through the
end of FY 2005, the Farm Service Agency (FSA) has made more than 87,000
loans to beginning farmers and ranchers, totaling $7.6 billion. FSA has
also created Federal-State beginning farmer partnerships by signing
Memorandums of Understanding (MOUs) with 20 State beginning farmer
programs through December 2005.
USDA also established an Advisory Committee on Beginning Farmers and
Ranchers in 1998. The Committee meets annually and has provided
recommendations to the Secretary. USDA has implemented some of the
recommendations.
The Farm Security and Rural Investment Act of 2002 required the Natural
Resources Conservation Service to provide higher payments to beginning
farmers and ranchers in some of its programs, and authorized the
Secretary to establish a Beginning Farmer and Rancher Development
Program.
4. Policy:
USDA's policy for Small Farms and Beginning Farmers and Ranchers is
based on the guiding principles for Federal farm policy as recommended
by the Secretary of Agriculture's National Commission on Small Farms
and the Advisory Committee on Beginning Farmers and Ranchers.
It is the policy of USDA to:
a. Encourage farming systems that produce safe, healthy, and diverse
food, fiber and wood products, and create greater opportunities to
connect farmers with consumers.
b. Encourage and support an agricultural system that sustains and
strengthens rural communities, cultural diversity, and encourages and
rewards responsible stewardship of natural resources.
c. Enable farmers, farm workers and ranchers to live and work in a safe
and responsible environment, own and operate farms and ranches as a
livelihood, and enhance opportunities for them to generate farm and
ranch incomes comparable to other economic sectors where feasible.
d. Establish and foster marketing, development, credit, and outreach
programs that improve the competitiveness of small and beginning
farmers and ranchers and give priority to farmer-owned and farm-based
businesses, especially those that foster local and regional competition
in production, processing, and distribution of food, fiber, and wood
products that connect small farms and beginning farmers and ranchers
and consumers at the local and regional levels.
e. Establish and support research, development, marketing, incentive,
regulatory, and outreach programs and initiatives that focus on the
special needs of small farms and beginning farmers and ranchers,
especially those programs that help small farms and beginning farmers
and ranchers develop alternative enterprises, value-added products, and
collaborative marketing efforts, including cooperatives that enhance
stewardship of biological, natural, human, and community resources.
f. Make special efforts to meet the credit needs of small farms and
underserved, minority, women, and beginning farmers and ranchers.
g. Encourage and emphasize educational, outreach, marketing,
regulatory, credit, and other programs that will help ensure new
generations of small farmers and ranchers can gain access to the
resources they need.
h. Foster collaboration among public and private sector agencies,
programs, and institutions, including farm and community-based
organizations, to meet the financial, educational, and technological
needs of small farms and beginning farmers and ranchers, including
developing small farms and beginning farmer and rancher networks, joint
enterprises, and mentoring systems.
i. Encourage all USDA agencies, the land grant institutions, and
collaborating public and private sector institutions to emphasize
sustainable agriculture, sustainable forestry, and agroforestry as
profitable, environmentally sound, and socially desirable strategies
for small farms and beginning farmers and ranchers.
5. Action Ordered:
a. This regulation establishes a Small Farms and Beginning Farmers and
Ranchers Council, chaired by the Deputy Secretary. Membership will be
comprised of the Under Secretary, Marketing and Regulatory Programs;
Under Secretary, Farm and Foreign Agricultural Services; Under
Secretary, Food, Nutrition and Consumer Services; Under Secretary, Food
Safety; Under Secretary, Natural Resources and Environment; Under
Secretary, Research, Education and Economics; Under Secretary, Rural
Development; Chief Economist; Assistant Secretary for Administration;
Assistant Secretary for Civil Rights; Director of the Office of
Outreach; General Counsel; and the Director, Office of Budget and
Program Analysis.
b. The Director of the Office of Small Farms Coordination, Office of
the Under Secretary, Research, Education and Economics, and the
Designated Federal Official for the Secretary's Advisory Committee on
Beginning Farmers and Ranchers will serve as Co-Executive Directors of
the Small Farms and Beginning Farmers and Ranchers Council and are
responsible for coordinating, advocating, and facilitating
implementation of small farms and beginning farmer and rancher policies
and programs.
c. The Director of the Office of Small Farms Coordination will chair a
Department-wide group of coordinators for each mission area, individual
agencies, the Designated Federal Official for the Secretary's Advisory
Committee on Beginning Farmers and Ranchers, the Office of Outreach,
the Office of Civil Rights, the Office of Chief Economist, the Office
of Budget and Program Analysis and the Office of the General Counsel
for the purpose of planning, recommending, and coordinating the
implementation of small farms and beginning farmers and ranchers
policies and programs within USDA. The Coordinators will make
recommendations to the Council. The Council will be responsible for
implementing any recommendations.
d. Equal opportunity practices, in line with USDA policies, will be
followed in all membership appointments as coordinators and committees.
To ensure that the recommendations of the coordinators and committees
have taken into account the needs of the diverse groups served by the
Department, membership shall include, to the extent practicable,
individuals who are minorities, women, and persons with disabilities.
e. The policies and actions ordered in this regulation are to be
reflected in all mission area and agency mission statements, strategic
plans, performance plans, and performance goals. These policies are to
be incorporated into all technical guides, handbooks, and materials
used to provide service to small farms and beginning farmer and rancher
operators (including extension publications).
--End
[End of section]
Appendix V: FSA and NRCS Beginning Farmer Definitions:
FSA and NRCS have different beginning farmer definitions in place.
While both definitions generally define a beginning farmer and rancher
as one who has operated a farm or ranch for 10 years or less who will
materially and substantially participate in its operation, only FSA's
definition considers an applicant's available resources as part of its
program eligibility requirements. FSA's definition also establishes
other requirements that relate to its loan programs. For example,
beginning farmers must agree to participate in borrower training. Table
9 presents a comparison of both FSA and NRCS beginning farmer
definitions.
Table 9: FSA and NRCS Beginning Farmer Definitions:
Farm Service Agency: As defined in 7 U.S.C. 1991(a)(11) and 7 C.F.R. §
1941.4 a beginning farmer or rancher is an individual or entity who:
* has not operated a farm or ranch, or who has operated a farm or ranch
for not more than 10 consecutive years;
* will materially and substantially participate in the operation of the
farm or ranch[A];
* meets the loan eligibility requirements of the program to which
he/she is applying;
* agrees to participate in such loan assessment, borrower training, and
financial management programs as the Secretary requires;
* demonstrates insufficient resources to continue farming or ranching
on a viable scale;
* does not own a farm greater than 30 percent of the average size farm
in the country (farm ownership loans only).
Natural Resources Conservation Service: As defined in 7 C.F.R. §§
1466.3 and 1469.3, a beginning farmer or rancher is an individual or
entity who:
* has not operated a farm or ranch or has operated a farm or ranch for
not more than 10 years;
* will materially and substantially participate in the operation of the
farm or ranch[A].
Source: GAO.
[A] If the applicant is an entity, all members must materially and
substantially participate in the operation of the farm or ranch.
[End of table]
[End of section]
Appendix VI: Comments from the Department of Agriculture:
USDA:
United States Department of Agriculture:
Office of the Secretary:
Washington, D.C. 20250:
September 12, 2007:
Ms. Lisa Shames:
Director, Natural Resources and Environment:
Government Accountability Office:
441 G Street, N.W.:
2T23-A, Room 2964:
Washington, D.C. 20548:
Dear Ms. Shames:
Thank you for providing the Department of Agriculture (USDA) the
opportunity to review the Government Accountability Office's (GAO)
draft report GAO 07-1130, "Beginning Farmers: Additional Steps Needed
to Demonstrate the Effectiveness of USDA Assistance." The Department
generally agrees with the GAO report and its recommendations; however,
we wish to offer the following comments.
We agree with GAO that it would be helpful for USDA to provide
additional emphasis in the Department's strategic plan, including
measures to assess outcomes of cross-cutting and departmental beginning
farmer assistance. As indicated by GAO, the Department provides a
significant amount of assistance to beginning farmers. This assistance
is provided by a number of agencies within several mission areas of the
Department. In February 2004, USDA held a stakeholder meeting to
solicit input on the concerns of small family farmers in order to
address their needs in the Department's Strategic Plan for 2005 to
2010. The results of that meeting are reflected in our Strategic Goal
2: Enhance the Competitiveness and Sustainability of Rural and Farm
Economies, which highlights the importance of beginning farmers to the
health of the rural economy and the interrelationships between USDA
programs aimed at assisting them. The plan identifies the Department's
means for measuring performance and strategies for improving
assistance. Individual USDA agency strategic plans are in turn linked
to the USDA Strategic Plan. Taken together, these plans provide a
comprehensive strategy to ensure that USDA programs to assist beginning
farmers are achieving stated objectives and goals.
The Administration has also developed a broad package of proposed
changes to several titles of the Farm Bill that will help future
generations of farmers and ranchers become established in production
agriculture. These proposals will help to address the challenges faced
by beginning farmers and support the success of the next generation of
farmers and ranchers. These proposals will provide tangible benefits
and help in leveraging assets to purchase or expand farm and ranch
operations. Key elements of the beginning farmer and rancher proposals
include an increase in direct payments, targeting 10 percent of
conservation payments to beginning farmers and ranchers, reducing the
interest rate under the Beginning Farmer and Rancher Down Payment Loan
Program and doubling the maximum loan amount, and creating a combined
maximum for direct operating loans and direct ownership loans of
$500,000. We would note that debate on the 2007 Farm Bill is not yet
completed in Congress. Once we know the outcome of the Farm Bill debate
and of our proposals on this topic, we will be better able to develop
more focused measures.
With regard to the GAO's recommendation that USDA track progress toward
achieving the Department's goals for assisting beginning farmers, we
have the following comments. The Farm Service Agency (FSA) has followed
the legislative intent of the programs for its beginning farmer credit
assistance. FSA has dramatically increased the amount of credit
assistance provided to beginning farmers over the past several years,
meeting or exceeding its funding targets for lending to beginning
farmers in most loan program areas. In this regard, FSA has been
effective in providing assistance to beginning farmers and ranchers.
FSA's loan allocations provide financing to six to seven percent of the
farmers and ranchers in the country.
The draft report makes passing reference to a new performance measure
developed for the FSA Farm Loan Programs, which measures the percentage
of beginning farmers, minorities, and women financed by FSA. The
measure is identified in the report as a measure of loan volume and not
an outcome measure. While not an outcome measure in terms of whether or
not FSA's credit assistance is contributing to the improved financial
well being of its customers, it is more than a measure of loan volume.
The measure demonstrates agency success in accomplishing one of the
primary objectives in its Fiscal Year 2005-2011 Strategic Plan,
providing access to capital. Specifically, the measure was developed as
an indicator of FSA's success in providing credit assistance to the
targeted population of farmers which have been historically underserved
by the commercial lending industry.
The report also discusses the difference in definitions of beginning
farmer and rancher used by FSA and the Natural Resources Conservation
Service. It is important to note that FSA beginning farmer programs and
funding targets are tied to the statutory definition of "qualified
beginning farmer and rancher," set forth in Section 343(a), 7 U.S.C.
1991 (a) (11). FSA has virtually no discretion in setting the
definition because the statute is very specific.
The report indicates that the Risk Management Agency's (RMA)
partnership programs are not specifically targeting beginning farmers.
Since 2003, RMA has applied actions to specifically target beginning
farmers. In a Federal Register Notice published on June 13, 2003, RMA
adopted the recommendation made by the USDA Secretary's Advisory
Committee on Beginning Farmers and Ranchers in 2002 to target beginning
farmers and ranchers. RMA stated that higher scores would be given to
applicants that were sensitive to the needs of beginning farmers and
ranchers and to those who planned to partner with organizations that
assist beginning farmers and ranchers. In a separate Federal Register
Notice dated March 12, 2007, RMA stated that applicants for the
Community Outreach and Assistance Partnership Program would receive
higher scores to the extent that they can document and demonstrate that
a substantial effort has been made to partner with organizations that
can meet the needs of producers that are beginning farmers and
ranchers. This year RMA is also sponsoring "The Risk Management
Strategies for Beginning and Small Farmers and Ranchers Conference",
which will be held in Milwaukee, Wisconsin, from September 12 through
15, 2007. This conference will promote the success and viability of
beginning and small farmers and ranchers.
With respect to GAO's recommendation that the Secretary develop a cross-
cutting departmental strategic beginning farmer performance goal, it is
also important to note that RMA has performance measures that
demonstrate support for beginning farmers. Some of these performance
measures are reported in the Annual Performance Plan; others are
tracked and reported only in internal management reports. RMA's
information is used to track and demonstrate the effectiveness of RMA
assistance to beginning farmers in support of the USDA Strategic Plan
for 2005-2010.
Once the 2007 Farm Bill is passed we will be better able to develop
more focused measures for beginning farmers and ranchers. Again, thank
you for the opportunity to comment on the draft GAO report; "Beginning
Farmers: Additional Steps Needed to Demonstrate the Effectiveness of
USDA Assistance."
Sincerely,
Signed by:
Mike Johanns:
Secretary:
[End of section]
Appendix VII: GAO Contact and Staff Acknowledgments:
GAO Contact:
Lisa Shames, (202) 512-3841:
Staff Acknowledgments:
In addition to the individual named above, Charles Adams, Assistant
Director; Kevin Bray; Barbara El Osta; Paige Gilbreath; Lynn Musser;
Carol Herrnstadt Shulman; and Tracy Williams made key contributions to
this report.
[End of section]
Footnotes:
[1] For simplicity, we refer to beginning farmers and ranchers as
"beginning farmers" in this report.
[2] USDA's Farm Service Agency defines socially disadvantaged farmers
or ranchers as members of groups whose members have been subjected to
racial, ethnic, or gender prejudice because of their identities as
members of a group without regard to their individual qualities. The
Farm Service Agency defines these groups to include women, African-
Americans, American Indians, Alaskan Natives, Hispanics, Asian-
Americans, and Pacific Islanders.
[3] Pub. L. No. 102-554, 106 Stat. 4142.
[4] GAO, Farm Credit Administration: Oversight of Special Mission to
Serve Young, Beginning, and Small Farmers Needs to Be Improved, GAO-02-
304, (Washington, D.C.: Mar. 8, 2002). Among other things, GAO found
that just over half of the Farm Credit System's lending institutions
had features designed to target services to young, beginning, and small
farmers. The Administration agreed to make improvements in response to
GAO's recommendations.
[5] GAO, Assistance to Beginning Farmers, (Washington, D.C.: May 14,
1982), and GAO, Farm Finance: Number of New Farmers Is Declining, GAO/
RCED-93-95 (Washington, D.C.: May 3, 1993).
[6] GAO, Suggested Areas for Oversight for the 110th Congress, GAO-07-
235R (Washington, D.C.: Nov. 17, 2006).
[7] Pub. L. No. 101-624, 104 Stat. 3359.
[8] FSA reserves 35 percent of direct operating loans and 70 percent of
direct farm ownership loans for beginning farmers until September 1 of
each fiscal year. It reserves 40 percent of guaranteed operating loans
and 25 percent of guaranteed farm ownership loans for beginning farmers
until April 1 of each fiscal year.
[9] The Conservation Reserve Program is a voluntary program through
which agricultural landowners retire farmland for conservation
purposes. Through this program, a landowner can receive annual rental
payments and cost-share assistance to establish long-term, resource-
conserving covers on eligible farmland.
[10] Pub. L. No. 107-171, 116 Stat. 134.
[11] For CSP, cost-share is only provided on new practice payments, a
small component of total CSP financial assistance.
[12] NRCS began tracking EQIP and CSP assistance to beginning farmers
in fiscal year 2004. CSP data provided by NRCS used to compute totals
in this section reflect financial assistance for contracts approved in
a given fiscal year, rather than cumulative financial assistance for
current and previous year contracts. NRCS does not track the assistance
provided to beginning farmers through its other conservation programs.
[13] These include, for example, the Community Outreach and Assistance
Partnership Program, Commodity Partnerships for Risk Management
Education Program, and the Commodity Partnerships Small Sessions
Program.
[14] FSA's estimate of the number of beginning and socially
disadvantaged farmers is based on its analysis of data collected in the
2002 Census of Agriculture--the total number of all principal farm
operators identified as beginning farmers (estimated as farmers with
less than 10 years on their current farming operation), women, and
minorities with at least $10,000 in gross sales.
[15] Of these 42,495 beginning and socially disadvantaged borrowers,
25,064 were beginning farmers and 17,431 were socially disadvantaged.
[16] John Nwoha, Bruce L. Ahrendsen, Bruce L. Dixon, Eddie C. Chavez,
Sandra J. Hamm, Daniel M. Settlage, and Diana Danforth. Farm Service
Agency Direct Farm Loan Program Effectiveness Study. Research Report
977. Arkansas Agricultural Experiment Station, Division of Agriculture,
University of Arkansas System. Fayetteville, Arkansas. December 2005.
The study analyzed a sample of loans originated between October 1,
1993, and September 30, 1996.
[17] These statistics represent beginning farmers who are not
considered socially disadvantaged. The study calculated separate
figures for borrowers who were both beginning and socially
disadvantaged. Of beginning, non-socially disadvantaged farmers using
direct operating loans who had left the program by 2004, about half (50
percent) graduated to another form of credit, such as FSA guaranteed
loans or commercial loans, or no longer needed credit. The remainder
left farming voluntarily (approximately 35 percent), involuntarily
(approximately 12 percent), or through retirement (2 percent).
[18] GAO. Results-Oriented Government: Practices That Can Help Enhance
and Sustain Collaboration among Federal Agencies, GAO-06-15
(Washington, D.C.: Oct. 21, 2005).
[19] D. Newton and M. Ahearn. Management Strategies of Beginning
Farmers and Ranchers. Poster Presentation. Presented at the American
Agricultural Economics Association Meetings, July 29-31, 2007.
Portland, Oregon.
[20] Related reports include, among others, Robert A. Hoppe, Penni
Korb, Erik J. O'Donoghue, and David E. Banker, Structure and Finances
of U.S. Farms. Family Farm Report, 2007 Edition. USDA Economic Research
Service. June 2007; Fred Gale, "Age-Specific Patterns of Exit and Entry
in U.S. Farming, 1978-1997." Review of Agricultural Economics, vol. 25,
no. 1 (2003); and Fred Gale, The New Generation of American Farmers:
Farm Entry and Exit Prospects for the 1990's. USDA Economic Research
Service. October 1994.
[21] Robert A. Hoppe and Penni Korb. Understanding U.S. Farm Exits.
USDA Economic Research Service. June 2006.
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