A western Iowa banker, Gus Barker, president and CEO of First Community Bank in Rockwell City, Pomeroy, Fonda, and Newell, testified before the U.S. Senate Agriculture Subcommittee yesterday (Thursday) to discuss the challenges young farmers face. According to Senator Joni Ernst (R-IA), the most significant obstacle for producers when starting out is the high cost of agricultural land.
Around 500 acres is the generally accepted amount of tillable land required for a smaller operation to turn a sustainable profit, so a young farmer looking to buy would need to spend more than a million dollars to purchase just 100 acres. Barker says the U.S. Department of Agriculture (USDA) has programs to help these individuals access the required capital, but they are often too slow-moving for them to be effective.
Barker says it often takes a minimum of 60 days for a USDA loan to be approved, but it is not unheard of for approval to take as long as six months, which is the length of an entire growing season in Iowa. Barker suggests a new program, known as USDA Express, will help alleviate some of the timeline-related challenges.
Barker adds state incentives for owners to sell to young farmers have been successful, and something similar at the federal level may be warranted.
Ernst and Barker made their comments Thursday during a hearing of the Senate Agriculture Subcommittee on Commodities, Risk Management, and Trade.
