New Funding Opportunity for Young and Beginning Farmers Purchasing Land
Updated: Jul 23, 2020
By Sarah Everhart
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This summer the Maryland Agricultural and Resource-Based Industry Development Corporation (MARBIDCO) launched the Next Generation Farmland Acquisition Program (“Next Gen Program”) to help qualified young and beginning farmers interested in purchasing farmland.
The Next Gen Program allows MARBIDCO to provide a qualified “beginner farmer” (and possibly other) applicants with a farm down payment to help meet the equity requirements of a commercial lender, as a bank would be making a mortgage loan towards assisting with the farm purchase too. A “beginner farmer” is someone who has not operated a farm or ranch for more than 10 years, has at least one year of farming experience, or has completed a qualified farm management-training program that includes substantial fieldwork experience, and expects to substantially participate in the farm operation on the subject property.
After the land purchase, the applicant will have several years to sell a permanent conservation easement on the farmland to a rural land conservation program, thus extinguishing the development rights on the property forever. The funding from selling the easement shall then be used to repay MARBIDCO for the down payment assistance plus a 3% fee to help the program continue in the future. If the applicant cannot sell the permanent easement within the specified timeframe, the option will be exercised (for no additional money) to grant the easement to the “default easement holder,” either the county agricultural land preservation program, or a private rural land trust MARBIDCO selects at the end of the option period).
According to MARBIDCO, “the Next Gen Program is basically a rapid-response, farmland conservation easement-option-purchase program, designed to help facilitate the transfer of farmland to a new generation of farmers, while also effectively helping to preserve agricultural land from future development.”
While it is most likely too late for any interested farmers to apply for 2017 funding (farmers were to have contacted County Agricultural Land Preservation staff by July 31, 2017 and materials are due to MARBIDCO by August 31, 2017), it is never too early for farmers interested in participating in the program for 2018 to start preparing.
An interested applicant should start by consulting their respective County Agricultural Land Preservation staff to discuss the subject farm property and its potential for a future permanent conservation easement. The applicant will also need a contract of sale for the subject farm property with a long enough term (at least 6 months) to allow for the process to be approved, a provision for the return of the down payment to the applicant in the event the Next Gen Program funding is not approved, and a farm business plan.
For more information about the Next Gen Program, contact Allison Roe, MARBIDCO Financial Programs Associate, at (410) 267-6807, or email@example.com.