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FSA Proposes Expansion of Beginning Farmer and Rancher Land Contract Program

September 24, 2010


On Thursday, September 23, USDA’s Farm Services Agency (FSA) issued a proposed rule to implement the Land Contract Sales Program pursuant to the 2008 Farm Bill.  The proposal makes permanent the Beginning Farmer and Rancher (BFR) Land Contract Guarantee Pilot Program from the 2002 Farm Bill.  As required by the new Farm Bill, the new rule makes the program applicable nationwide and also expands the program to include socially disadvantaged farmers.

The pilot program was implemented in nine states to aid farm transfers between private sellers and beginning farmers.  The pilot program made the seller of the land an up to two-year  “prompt payment” guarantee in case the beginning farmer ran into trouble making payment. Under the proposed permanent program, the payment guarantee would expand to give the seller the option of choosing either:

(1) Prompt payment guarantee of three years’ amortized annual installments plus the amount of three years’ real estate taxes and hazard insurance premiums (instead of two under the pilot), or

(2) Standard 90 percent guarantee of outstanding principal on the land contract.

In its announcement, FSA stated that the program will “provide another alternative for intergenerational transitioning of farm real estate to help ensure the future viability of family farms for beginning farmers and socially disadvantaged farmers.”

FSA will accept comments on the proposed rule through November 22, 2010.  NSAC, which developed the idea for the program as part of its previous Farm Bill campaigns, will submit comments in support of the proposed rule.

For more information regarding the proposed changes to the program, including explanations of the terms “beginning” and “socially disadvantaged” farmers and ranchers, click here.


Categories: Beginning and Minority Farmers, Commodity, Crop Insurance & Credit Programs


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