Capital Access for Beginning Farmers and Ranchers
As the average age of U.S. farmers approaches 58 years, the agricultural sector faces an urgent need to support beginning farmers and ranchers (BFRs) to ensure continued food production and rural economic stability. Among the most significant and persistent challenges these new producers face is access to capital. Starting a farm or ranch demands substantial upfront investment in land, equipment, infrastructure, and livestock – costs that are often beyond the reach of BFRs who typically lack the credit history, collateral, or assets that traditional lenders require. Many banks view agriculture as a high-risk industry and prefer established operations with proven financial records, leaving beginning farmers with limited financing options.
This difficulty is further compounded by market instability and thin profit margins in the early years of farming. Many BFRs also pursue alternative or small-scale business models – such as organic production, regenerative practices, direct-to-consumer sales, and urban agriculture – that do not align well with conventional lending criteria. Moreover, while government programs such as USDA loans exist to support BFRs, many farmers find the application processes complex and eligibility requirements that do not fully accommodate non-traditional farm operations.
Financial Literacy and Business Planning Resources
Financial literacy is a cornerstone of success in agriculture, especially for beginning Farmer Veterans transitioning into the complex world of agribusiness. Starting and sustaining a farm requires not only agricultural expertise but also a solid grasp of financial management. Developing a comprehensive business plan with realistic projections is critical for securing funding and ensuring long-term viability. Veterans must fully understand their current financial standing, including credit history, assets, liabilities, and overall cash flow, before investing in a farming operation.
It is essential for new producers to determine how much capital they can safely commit to the business without jeopardizing their personal financial stability. Equally important is having a clear vision of their financial goals that they want to get out of their business – whether that means generating supplemental income, creating a sustainable full-time business, or building long-term equity.
Additionally, understanding the variety of financial tools available is key to making informed decisions. Veterans should become familiar with the differences between financial instruments such as term loans, operating loans, and credit lines. Knowing when and how to use these financial tools can help avoid unnecessary debt and improve the chances of building a resilient and profitable farming operation. Over the year the Farmer Veteran Coalition has formed long-term partnership with many organizations to assist FVC in helping out members. Here are a few of those resources.
The University of Minnesota’s Center for Farm Financial Management (CFFM) offers robust support in financial literacy and business planning, including a partnership with the Farmer Veteran Coalition to deliver virtual consulting tailored to Veterans. This includes personalized assistance with budgeting, planning, and recordkeeping to build a strong financial foundation.
CFFM tools like AgPlan, a free online platform for creating customized business plans, and FINPACK, a powerful software suite for financial analysis and cash flow projections, help farmers make informed decisions and secure funding. These tools are widely used by advisors, lenders, and farmers alike.
Additional resources support sustainable business planning and management. The USDA-supported Farm Answers portal offers a library of videos, templates, and webinars. ATTRA’s Business Planning Portal, provided by NCAT, focuses on regenerative and sustainable farms, while the Rooted in Vermont Farm Viability Program supplies real-world examples and templates for cash flow and business plans.
For ongoing financial literacy, tools like Farm and Financial Records (Penn State Extension) and Farm Finance Scorecard (Cornell Small Farms Program) help farmers assess and improve their recordkeeping habits. AgBiz Basics, an online course from Farm Credit University, teaches key skills like credit, budgeting, and decision-making. Farm Commons offers legal and financial risk education tailored to farm businesses.
Specialized training programs further support targeted audiences. Whole Farm Planning aids new farmers in aligning their business and personal goals. Annie’s Project empowers women farmers with business and risk management skills, while Armed to Farm integrates financial planning into Veteran-focused agricultural training. Together, these resources equip farmers with the knowledge and tools to build resilient, profitable operations.
Producers with strong credit histories typically have little trouble securing loans from commercial banks. However, if your credit is less than stellar, or if you lack credit history, sufficient collateral, or assets, there are still financing options available.
The Role of Farm Credit in Supporting Beginning Farmers and Veterans
A vital institution in the agricultural lending landscape is the Farm Credit System (FCS), a nationwide network of borrower-owned cooperatives established by Congress in 1916. Farm Credit understands the unique challenges facing agriculture – including seasonal income fluctuations, high startup costs, and market volatility – making it uniquely suited to support BFRs who may lack collateral, experience, or generational land assets.
For military Veterans transitioning into agriculture, Farm Credit provides more than loans – it offers a comprehensive support system. Many Farm Credit institutions include Veterans in their Young, Beginning, and Small (YBS) Farmer programs, which offer operating loans, land and equipment financing, and flexible underwriting standards tailored to new farmers. These financial products are paired with mentorship, business planning assistance, and financial literacy training, helping Veterans navigate the complexities of farm ownership.
A cornerstone of Farm Credit’s Veteran support is its partnership with the Farmer Veteran Coalition (FVC). This collaboration connects Veterans with critical resources such as the Farmer Veteran Fellowship Fund, which awards small grants for equipment and infrastructure. Farm Credit also supports the Homegrown by Heroes label and FVC’s online sales platform MarketMaker – both initiative that enables Veteran producers to market their products under a nationally recognized brand, enhancing their market visibility and success.
Examples of Veteran-focused initiatives include Farm Credit East’s “FarmStart” program, AgGeorgia Farm Credits specialized financial advising for Veterans, and Texas Farm Credit’s inclusion of Veterans in its Young Leaders Council and educational workshops. Farm Credit also coordinates with USDA programs like FSA’s Veteran designations and the Beginning Farmer and Rancher Development Program (BFRDP), reinforcing the support network available to Veteran farmers.
By combining targeted financing, education, and partnerships, Farm Credit is helping Veterans build resilient agricultural operations while strengthening the broader future of U.S. agriculture.
USDA Programs Designed for Beginning Farmers and Ranchers
The USDA offers a comprehensive suite of programs to support beginning farmers and ranchers – including military Veterans – in gaining access to capital, education, and technical assistance. One of the key agencies delivering this support is the Farm Service Agency (FSA), which provides a range of loan options specifically tailored to meet the unique needs of Beginning Farmers and Ranchers (BFRs).
To qualify for an FSA loan, applicants must generally demonstrate that they were unable to secure financing through a conventional commercial lender. Once eligible, borrowers can explore several FSA loan products. Direct Farm Ownership Loans can be used to purchase farmland, construct, or improve buildings, and promote long-term land security. Direct Operating Loans help cover essential annual expenses such as seed, equipment, livestock feed, and hired labor.
In addition, Guaranteed Loans – which are issued by commercial lenders but backed by the FSA – help reduce lender risk and offer more favorable terms for borrowers who may not meet traditional lending criteria. For those just starting out or working on a smaller scale, FSA Microloans offer streamlined applications and reduced paperwork for loans of up to $50,000, making them ideal for early-stage, specialty crop, or urban farming operations.
These USDA-backed financial tools are designed not only to ease entry into agriculture but to support the long-term viability of diverse, next-generation farmers – including those who have served in the military.
By combining these USDA programs with local service centers, state agencies, and Veteran-focused organizations such as the Farmer Veteran Coalition, beginning farmers and ranchers can access crucial financial support and guidance needed to build sustainable operations.
Innovative Approaches and Policy Reforms
Despite these longstanding barriers, innovative strategies and policy reforms are emerging to better support BFRs. Farmer training incubators operated by nonprofits, land trusts, and university extension programs provide hands-on agricultural education alongside financial tools such as low-interest loans, matched savings programs, and microgrants. These initiatives help beginning farmers transition from training programs into independent farm ownership.
Local governments are also playing a critical role in tackling the pressing barrier of land access. Through land-link programs, agricultural easements, public land leasing, and tax incentives for landowners who lease or sell farmland to new farmers, local policies help make farmland more affordable and accessible to BFRs. (Please refer to FVC’s newsletter for April for more information on land access).
At the federal level, recent Farm Bill proposals aim to improve credit access by reforming USDA loan programs, streamlining Farm Service Agency (FSA) processes, raising loan limits, and increasing funding for outreach and technical assistance. Importantly, these reforms also seek to expand eligibility to diverse farm models, including cooperatives, food hubs, and urban farms.
Nonprofits and Loan Funds
These organizations offer low-interest or flexible financing with strong technical support.
Mission-driven lenders like Kiva U.S. offer 0% interest microloans up to $15,000 for beginning farmers, often supported through crowdfunding. The Conservation Fund’s Working Farms Fund helps farmers access affordable land through lease-to-own arrangements, preserving farmland for future generations. RSF Social Finance provides funding for regenerative, organic, and socially responsible agricultural enterprises. These lenders prioritize impact over profit, expanding access to capital for underserved and values-driven farmers.
The Farmer Veteran Fellowship Fund and Beyond
The Farmer Veteran Fellowship Fund, administered by the National Farmer Veteran Coalition, is a critical grant program supporting Veterans launching agricultural careers. These competitive grants help cover startup costs like equipment and infrastructure, easing financial burdens during the crucial early years of operation. The program’s annual application cycle typically opens after the first of the year, providing timely support to Veterans in spring right before planting.
State-Based Agricultural Loan Programs (Often Partnered with Mission Lenders)
State-based agricultural loan programs often collaborate with mission-driven lenders to expand access to capital for farmers. These partnerships help deliver flexible, affordable financing tailored to the needs of beginning, underserved, or sustainable producers. For example.
- The Minnesota Rural Finance Authority (RFA) offers loan programs for farm startups, land purchases, and disaster recovery, often in partnership with local lenders.
- The Colorado Agricultural Development Authority (CADA) supports new and young farmers through tax-exempt financing and other tools.
By leveraging public and nonprofit resources, these programs strengthen farm viability, rural economies, and agricultural resilience at the state level.
Investing in the Future of Agriculture
Beginning farmers and ranchers – especially those who have served in the military – face unique challenges, but they also benefit from an expanding network of financial, educational, and technical resources tailored to their needs. Federal and state programs, nonprofit partnerships, mission-driven lenders, and industry cooperatives like Farm Credit are collaboratively working to dismantle barriers around capital, land access, and training.
Supporting Veterans and all beginning farmers is more than an individual success story – it is an investment in the resilience and sustainability of U.S. agriculture. By empowering new producers today with the tools, capital, and knowledge necessary to thrive, we lay the foundation for a diverse, innovative, robust farming sector that will nourish future generations and sustain rural economies nationwide.
If you have any questions or need additional resources, please telephone the Farmer Veteran Coalition call center at 855-382-3276. We have dedicated staff that are here to help you. You can also email at support@farmvetco.org. Together, we will find solution that will help you take the next steps forward in your operations.
Hope you are enjoying Spring!
About Farmer Veteran Coalition
Based in Waco, Texas, the National Farmer Veteran Coalition empowers Veterans to build meaningful careers in agriculture. FVC offers resources, training, and support to help them transition into farming or agricultural employment. Through education, mentorship, and partnerships, FVC creates economic opportunities, fosters sustainability, and enables Veterans to continue serving by strengthening American agriculture and their communities.
Established in 2009, some of FVC’s in-house programs include the Farmer Veteran Fellowship Fund small grant program, the nationally recognized Homegrown By Heroes label for Veteran-grown products, MarketMaker, Hives Training Program, Fields4Valor Food Security Program, and the national stakeholders conference. For more information, visit www.farmvetco.org or follow them on Facebook and Instagram at @FarmerVeteranCoalition and on YouTube at https://www.youtube.com/@farmvetcoalition/videos.
