NSAC's Blog

New Guide Available on Matched Savings Accounts for Beginning Farmers

October 28, 2014

When Congress returns to Washington D.C. next month after Election Day and several months on recess, they will have important decisions to make concerning how to fund the government for the rest of the fiscal year.

Among these discussions will be negotiations over how much funding to provide to critical food and farm programs that farmers count on every day — like FSA farm loans, conservation programs, sustainable agriculture research, rural development grants, and farmer food safety training.

Also up for debate, will be whether or not to provide first time funding for the Beginning Farmer and Rancher Individual Development Account (BFRIDA) program – a financial training and asset-building program that aims to help beginning farmers and ranchers of limited means save for their farming futures.

How Does an Individual Development Account Work?

Beginning farmer individual development accounts aim to help new and aspiring farmers save for expenses needed to start their own farm and ensure they have the training to successfully launch and sustain their own farm business.

IDAs, or matched savings accounts, have been successfully used for years as an economic development tool in the housing and education sector.  These federal programs have helped countless individuals with limited resources save up enough money for a down payment on a home or to pursue an education.

The beginning farmer IDA program is modeled after the successful work of a few organizations and institutions, including California FarmLink, a non-profit organization and NSAC member group that works with limited resource farmers and farmworkers.  FarmLink has been experimenting for years now with how best to adapt this matched savings account model to create new opportunities in agriculture.

“IDAs are particularly well-suited for new-entry growers,” says Reggie Knox, Executive Director of California FarmLink. “This program provides them with critical business and financial training, as well as the structure and experience of a matched savings account that enables them to purchase an important asset for their farm enterprise.”

New Guide Published on How to Start Agricultural IDA Programs

Amidst the ongoing funding and budget debates on Capitol Hill, organizations that work with beginning farmers and understand the need for farmer financial training have used federal funding through the Beginning Farmer and Rancher Development Program (BFRDP) to pool their resources and expertise in order to replicate this model and establish more agricultural IDA programs across the country.

A collaborative of 16 organizations, led by California FarmLink, has recently published their findings from this 3 year project and best practices for how to start an agricultural IDA program in a new step by step manual – A Guide to Developing and Operating an Agricultural Individual Development Account (IDA) Program.

In the Guide, readers will learn the basics of IDAs and find a comprehensive collection of resources that the project partners have shared that cover many aspects of IDA program development, implementation, and management, such as marketing materials, financial education resources, program agreements with participants, evaluations and assessments, and program administration tools.

The Guide aims to be a resource for organizations interested in starting their own IDA programs and provides useful insights about these types of programs and help organizations lay groundwork, avoid pitfalls, and gather resources and ideas for starting, running, or expanding an agricultural IDA program.

Organizations involved in developing this guide include: Angelic Organics Learning Center (IL), Cascade Harvest Coalition (WA), Center for Rural Affairs (NE), Cuatros Puertas (NM), The Farm School (MA), Land Stewardship Project (MN), Michigan Land Use Institute (MI), New England Small Farm Institute (MA), Northwest Michigan Council of Governments (MI), Practical Farmers of Iowa (IA), Slow Money (CO), University of California Cooperative Extension (CA), University of Vermont Center for Sustainable Agriculture (VT), and Viva Farms (WA).

“With the completion of this project and the release of this guide, eight of these organizations are now stepping up to bring IDAs to the beginning farmers and ranchers they serve,” says Knox.  “These organizations are well-poised to utilize the BFRIDA program to assist growers in successfully launching and sustaining their farms, and we are sharing the project’s distilled knowledge and resources in the Guide to support other groups to develop and run IDA programs.”

Support Needed in Congress

However, funding to support and maintain these IDA programs hangs in the balance, as Congress continues to debate whether or not to provide federal dollars to launch this new farmer resource.  While some groups have been successful raising private funds to supply the necessary funds for the matched savings, what is needed is a coordinated and stable national funding stream to support these programs and new farmers across the country over the long run.

And while Congress saw the potential for a national IDA program in 2008 when it first created the Beginning Farmer and Rancher Individual Development Accounts program, and again this year when Congress reauthorized the program in the 2014 Farm Bill, the program has yet to receive any federal funding to date.

The most recent Census of Agriculture reports a continued increase in the average age of the American farmer and simultaneous decrease in the number of new farmers.  Additionally, access to credit continues to be cited as the number one barrier to those interested in pursuing a career in farming.  Now more than ever, our country’s farmers need increased and targeted support to help more farmers get started in agriculture.

Fortunately, Senate appropriators have recognized the need for more targeted efforts to reverse the aging of our country’s farmers and grow more new farmers, and have provided $2.5 million to jump start the IDA program in 2015.

NSAC and our beginning farmer allies across the country will continue to work with both the House and Senate as they work to finalize funding levels for federal programs for next year, and will be urging Members of Congress to support funding for beginning farmer IDAs in the final appropriations bill that will be needed to fund the government for the rest of 2015.

Categories: Beginning and Minority Farmers, Budget and Appropriations

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