Financial Resources and Assistance for Farmers and Ranchers

Updated: January 30, 2024

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Farmers and ranchers face increased challenges due to unique financial hurdles like unpredictable weather, market volatility and high operating costs. Access to resources and effective financial planning can help farmers navigate these difficulties. Such planning not only meets immediate needs but also fosters long-term sustainable practices. Additionally, various financial resources support farmers in managing cash flow and investing in advanced agricultural technology and livestock. These include grants and low-interest loans, which can revolutionize farm operations.

Overview of Farm Income in 2022

According to the latest report, U.S. farm households experienced varied income levels influenced by factors such as farm size and reliance on off-farm employment.

  • In 2022, the average income for farm households was $95,418, surpassing the national household average of $74,580.
  • Small family farms earning less than $350,000 in gross farm income represent 88% of U.S. farms.
  • Large-scale farms earning $1,000,000 or more in annual gross cash farm income had a median household income of $505,833 in 2022, predominantly from farming activities.

Source: Economic Research Service

Overall, larger farms reported higher median incomes, with a significant portion also coming from non-farming employment. Meanwhile, most smaller-scale farms depend on income from non-farm sources, emphasizing the utility of resources and financial planning for these operations.

Grants and Financial Resources for Farmers and Ranchers

Grants, often called 'free money,' provide significant financial aid that does not require repayment. These funds can assist farmers in filling funding gaps, providing essential capital and fostering innovation. Grants come from various sources: government entities, private organizations, community initiatives and veteran-specific programs. Beyond small-business grants, farmers and ranchers can also utilize other forms of assistance, such as technical aid, educational programs and cooperative initiatives. Regularly check grant websites for updates, as application processes and cycles vary.

Federal Grants and Assistance

Federal grants primarily support research and development, encouraging technological progress in the sector. Here are some notable grants from the U.S. Department of Agriculture (USDA) to assist and encourage farmers.

Renewable Energy Systems and Energy Improvement Grants

The USDA's Renewable Energy Systems & Energy Efficiency Improvement Grants support farmers and ranchers implementing renewable energy and energy efficiency measures. With funding from $2,500 to $500,000, this grant aids in energy audits, renewable energy system installations and energy efficiency upgrades. Agricultural producers and small businesses in eligible rural areas may apply.

Farmers Market Promotion Program (FMMP)

The Farmers Market Promotion Program (FMMP) by the USDA enhances connections between producers and consumers, strengthening local food economies. Grants range between $50,000 and $500,000, supporting marketing and outreach initiatives for new farmers. The competitive program requires adherence to a detailed application process available on its webpage. Ensure that you thoroughly research and fully meet eligibility requirements before applying.

Value-Added Producer Grant (VAPG)

The Value-Added Producer Grant (VAPG) supports agricultural producers in creating value-added products, expanding marketing opportunities and increasing income. It focuses on processing raw farm products into finished goods or developing new product lines. Grant amounts vary from $75,000 for planning to $250,000 for working capital projects. Priority is given to beginning, socially disadvantaged and small-scale farmers. Visit the program's website for eligibility and application details.

Beginning Farmer and Rancher Development Program (BFRDP)

The Beginning Farmer and Rancher Development Program (BFRDP) offers new farmers and ranchers financial support, education, mentoring and technical assistance. Eligible applicants include beginner farmers or ranchers, nonprofits and local, state, tribal or regional agricultural groups. Register Application details are available in the BFRDP Request for Application (RFA). Sign up for to stay informed about this grant opportunity. You will receive email alerts about the release of BFRDP Requests for Applications (RFAs).

Organic Certification Cost Share Program (OCCSP)

The Organic Certification Cost Share Program (OCCSP) assists producers and handlers in obtaining or renewing the National Organic Program (NOP) certification, covering up to 75% of certification costs, capped at $750 per scope. Applicants can apply through the FSA or participating state departments of agriculture.

State Grants for Farmers

State Farm grants typically aim to strengthen local agriculture and encourage sustainable farming practices, contributing to regional development. Some notable examples include the California Department of Food and Agriculture (CDFA), theTexas Young Farmer Grant, the Pennsylvania Very Small Meat Processor Grant and the Kentucky Agricultural Development Fund (KADF).

Contact your local authorities or thestate's Department of Agriculture for further information about additional state grant opportunities. They can provide details about state-specific grants tailored to your farming operations and requirements. Also, explore resources from local colleges, universities, community organizations and agricultural networks. These entities also often offer support and assistance to the farming community.

Private and Community Farm Grants

Private and community farm grants can bridge funding gaps where government grants fall short. These grants often provide more flexibility, accommodating a wide range of projects from new product development to innovative marketing strategies.

Brighter Future Fund

Launched in 2020, the Brighter Future Fund supports farmers in adapting to challenges like COVID-19, market shifts, severe weather and climate change. It focuses on enhancing farm viability, facilitating access to or protecting farmland and promoting regenerative agricultural practices.

Farm Bureau Ag Innovation Challenge

The Farm Bureau Ag Innovation Challenge is a competitive grant program that encourages innovative solutions to challenges in American agriculture. It offers $165,000 in total awards, up to $50,000 for the top prize, supporting early-stage agri-businesses. Visit the American Farm Bureau's official website for application details and more information.

Lakewinds Organic Field Fund (LOFF)

The Lakewinds Organic Field Fund (LOFF) grants are supported by Lakewinds Food Co-op and fund organic farming development and sustainability projects. Preference is given to those in Minnesota, northern Iowa and western Wisconsin. Since 2011, over $775,000 has been granted to more than 90 farms. The program expanded in 2015 to include more farms and increased funding, reflecting the co-op's commitment to the local farming community.

The FruitGuys Community Fund

The FruitGuys Community Fund offers grants to small and medium farms focused on sustainable operation enhancements. Grants of up to $5,000 are available to farmers with at least a year of experience. The process begins with an initial application, from which 20 applicants are selected for a detailed submission. Projects that improve sustainability and strengthen community ties are prioritized. Application tips and details are available on the organization’s website.

Veteran Farm Grants

The Farmer Veteran Coalition offers grants through its Farmer Veteran Fellowship Fund. This yearly program supports veterans starting their farming or ranching careers. Unlike typical grants, this fund directly pays third-party vendors for essential items the veteran identifies to kickstart their farm business.

Grant amounts range from $1,000 to $5,000, covering costs for all-terrain vehicles (ATV), beekeeping equipment, breeding livestock, fencing, scholarship and tractor implements. To be eligible, applicants must be members of the Farmer Veteran Coalition (membership is free), have served in any branch of the U.S. Military and have an "Honorable" discharge characterization.

Loans for Farmers and Ranchers

Farmers and ranchers have access to numerous agricultural loan programs to enhance their financial resources for operations. Notable options include the USDA's Farm Service Agency Loan Programs, Farm Storage Facility Loan Program and Small Business Administration (SBA) loans. Applying for these small-business loans can provide critical financial support for various agricultural needs.

USDA's Farm Service Agency (FSA) Loan Programs

The Farm Service Agency provides loans to assist farmers and ranchers in obtaining the necessary financing to start, grow or sustain a family farm. Key offerings include the USDA's Microloan Program, Beginning Farmers and Ranchers Loans, Emergency Farm Loans and Farm Ownership Loans. Each program offers different interest rates and terms for guaranteed loan maximum interest rates.

Use the Loan Assistance Tool to determine your eligibility for FSA Loans, explore various loan types, understand the loan requirements and follow straightforward instructions for completing application forms.

Farm Storage Facility Loan Program

The Farm Storage Facility Loan Program provides financing to farmers for improving on-site commodity storage and handling capabilities, facilitating farmers in constructing or upgrading on-farm storage facilities. This low-interest financing aids in improving cash flow and reducing post-harvest losses. The program offers significant benefits, enabling farmers to control their production, optimize market timing and reduce transportation costs.

SBA Loans

The Small Business Administration (SBA) offers an essential loan program for farmers and ranchers to provide access to capital for growth and sustainability. Key benefits of SBA Loans include competitive interest rates to manage borrowing costs and extended repayment terms to ease monthly financial burdens. To be eligible for these loans, applicants must have a robust business plan, a good credit history and demonstrate the ability to repay the loan. Interested farmers and ranchers should visit the SBA's website for detailed application instructions and comprehensive loan information.

Aggie Bonds

Aggie Bonds represent a federal-state partnership that enables private lenders to offer tax-exempt interest on loans to beginning farmers. This arrangement allows for loans at below-market interest rates, effectively passing savings onto farmers. Local lenders issuing Aggie Bonds typically offer rates one to three percent lower than standard commercial farm loan rates. Note that the liability for these bonds rests solely with the private lender, with no state agency or federal government liability.

Aggie Bonds' eligibility criteria were revised in 1996. Now, applicants can own up to 30 percent of their county's median-size farm or ranch, with a total value not exceeding $125,000. The 1996 amendments also permit beginning farmers to purchase property from relatives. State agriculture departments or similar authorities usually administer Aggie Bond programs. For additional information, visit the National Council of State Agricultural Finance Programs website and explore the "Types of State Ag Loan Programs" section for details.

Cost-Control Strategies for Farmers and Ranchers

Farmers and ranchers often face challenges such as weather unpredictability, including floods, droughts or extreme temperature changes, which impact crops and livestock. Inflation and fluctuating market prices further strain cash flow. Implementing effective financial planning and cost-control strategies, such as regular review of operating costs, efficient use of farm supplies and crop diversification, can help protect against economic fluctuations, manage spending and reduce uncertainties in farming and ranching.

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    Understanding Your Finances

    Keep close track of financial transactions and your farm's financial health. Regular analysis of financial statements helps identify underperforming areas, allowing for budget adjustments and strategic decisions to increase profitability.

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    Reviewing Operating Costs Regularly

    Identify and reduce unnecessary expenditures or areas where costs have escalated. Timely adjustments can prevent budget overruns and ensure optimal fund allocation.

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    Efficient Use of Fertilizers and Pesticides

    Properly managing these inputs significantly reduces costs. Efficient application ensures yield maintenance or increases without overspending, balancing input costs with output gains.

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    Diversifying crops or livestock spreads economic risk. This strategy helps cushion market fluctuations and environmental impacts and can open new revenue streams like agritourism or specialty products.

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    Implementing Energy-Saving Devices

    Reducing energy consumption through energy-efficient machines, alternative energy sources or optimized operations can lead to substantial savings.

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    Machinery Maintenance and Replacement

    Regular maintenance prevents breakdowns and extends machinery life, saving long-term costs. Investing in energy-efficient and durable machinery when replacements are needed can also cut future costs.

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    Technology and Automation

    Embracing modern agricultural technologies and automation can save labor costs, increase yields and reduce waste. Precision agriculture, for instance, optimizes resource use and crop management for cost efficiency.

Additional Resources

For further resources on agricultural practices, tools and information related to farming operations and agricultural professionals, consider exploring the following:

  • AgPlan: A free online tool that assists producers in developing personalized business plans equipped with industry-specific templates.
  • Beginning Farmers: This is a platform that supports new farmers with extensive resources, including guides, tools and training opportunities.
  • Farm Aid: Delivers various resources, including the Farmer Resource Network, which connects farmers to essential services and organizations.
  • The USDA's comprehensive resource for agricultural information, offering guidance on managing farm loans, grants and other agricultural services.
  • National Council of State Agricultural Finance Programs: This is a key resource for information on state-level agricultural finance programs and opportunities.
  • National Farmers Union: Provides support and education for farmers, including specialized programs like the Women's Conference and the Beginning Farmers Institute.
  • Rural Advancement Foundation International-USA: Offers diverse programs ranging from crop insurance reform to support for transitioning to sustainable agriculture.
  • The Farm Credit System: This is a government-sponsored entity specializing in providing rural and agricultural loans.
  • U.S. Department of Agriculture: Offers extensive resources and information on various aspects of agriculture in the U.S.
  • U.S. Department of Agriculture National Agricultural Library: A primary source for agricultural information, providing access to a wealth of resources related to agriculture and food science.
  • U.S. Department of Agriculture Rural Information Center: A key resource for rural information, offering a wealth of data and services related to rural and agricultural issues.

About Nathan Paulus

Nathan Paulus headshot

Nathan Paulus is the Head of Content Marketing at MoneyGeek, with nearly 10 years of experience researching and creating content related to personal finance and financial literacy.

Paulus has a bachelor's degree in English from the University of St. Thomas, Houston. He enjoys helping people from all walks of life build stronger financial foundations.