Debt Delays Some Missouri Graduates From A Dream: Farming

The newest generation of aspiring farmers is encountering an obstacle unlike any the farming industry has grappled with before – student loan debt. Today’s young farmers, like other young professionals in different fields, are graduating with more student debt burden than any generation before them.

This debt burden has placed an additional obstacle on top of the many that have always existed to entering the noble profession of farming. In this article, learn what is unfolding as graduates, industry and lawmakers examine this issue and strategize towards lessening the burden for future farmers.

The Student Loan Debt Burden for Young Farmers

The Pew Charitable Trusts reports that many young graduates are emerging with brains packed full of socially responsible, innovative and eco-friendly farming ideas. There is just one problem: their wallets are not so full as their minds.

The average student debt burden for aspiring young farming graduates is around $35,000, according to the National Young Farmers Coalition’s annual report. This may not sound so unmanageable, until it is compared with the funding required to launch a new farm or update an existing one.

To further complicate the financial burden, the learning curve for a young farmer – even a brilliant, expertly trained new graduate – can be steep. It can take time to translate intellectual classroom concepts into practical daily steps to get a working farm up and running, let alone profitable.

But the biggest burden of all may just be the student loan monthly repayment requirements. Repaying student loans monthly works well for young professionals who get paid bi-weekly or monthly.

But in farming, it is more the norm to get paid just once annually after the harvest is reaped and sold. In the meantime, most farmers will run lean, withdrawing against the previous year’s profits (if there were any) to keep the farm running and their families fed.

Solving the Student Loan Debt-Based Farming Crisis

When examined from this straight-line perspective, solving the growing crisis in the Missouri-area farming industry may seem untenable. However, industry professionals and lawmakers are determined to find a new pathway to support young farming graduates with a desire to enter the field.

Several options have been highlighted, although to date their best chance of easing the student debt burden for young farmers come when the benefits are combined, rather than being used in isolation.

Congressional Student Loan Forgiveness Bill.

The proposal that has gotten the most attention is a Congressional bill to add farmers to the nation’s list of eligible recipients of the federal loan forgiveness program.

This proposed new legislation at the federal level includes the following benefits to farmers with student loan debt:

– Classifying farming as a “public service” so that farmers with student debt can be reclassified as public servants under the federal public servant employee loan forgiveness program.
– The recipient must be working full-time as a manager or employee of a working farm.
– The recipient must commit to 10 years of a full-time career in farming.
– The farm must post gross revenue receipts of $35,000+ annually.

However, federal loan forgiveness would still only kick in after the recipient has made monthly repayments (with the monthly amount adjusted for income) for 10 years.

State Sponsored Loan Forgiveness Initiatives.

The Missouri Young Farmers Coalition is one state organization that has pledged public support for the federal student loan forgiveness bill.

In addition, the organization posts updates about state and federal programs that provide other sources of financial aid to young farmers, such as the following:

– Farm insurance reimbursement up to 70 percent through the Missouri Department of Agriculture.
– Educational scholarships for young aspiring farmer/students.
– A number of state-sponsored grants to assist produce and livestock farmers with various financial costs associated with running a productive farm.

U.S.D.A. Farm Service Agency Loan Program.

This federal loan assistance program provides loans to aspiring farmers who might not otherwise be able to qualify for the level of funding needed to launch a new farm.

With low interest rates and different types of loan options to meet different needs and goals, this program is not new. But it is receiving more public coverage in the wake of the increasing barriers to young farmers trying to enter the industry.

U.S.D.A. Natural Resources Conservation Services-Missouri.

This state-run, federally funded program provides financial assistance to farmers with an eye towards maintaining and stabilizing natural resources conservation. The program currently offers three different types of financial assistance as follows:

– Agricultural Management Assistance (AMA). This program is designed to encourage farmers to use conservation strategies to manage and reduce risk.

– Conservation Stewardship Program (CSP). This program is designed to support farmers to maintain and improve their existing conservation-based activities.

– Environmental Quality Incentives Program (EQIP). This program is designed to support farmers to innovate and expand conservation-based activities that will improve the quality of natural resources, including soil, water, air and wildlife habitats.

The Future of Young Farmers in Missouri

It is clear young farmers have a critical need for student loan relief and professional support to enter the industry. It is also increasingly clear that there is interest in providing this relief and support at both federal and state levels to recognize the public service farmers provide.

However, it is still not yet clear exactly how such relief and support will be provided. Some young farmers simply have to delay their farming ambition for a few years, getting a day job to pay down their student debt.

Other young farmers choose to take internships at working farms to learn valuable skills towards their eventual career. Ultimately, these young graduates’ commitment to farming is strong and their spirit is persevering.

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