Who qualifies as a beginning farmer?
A beginning farmer is defined in the federal tax law as an individual who has not at any time had any direct or indirect ownership in substantial farmland in which such individual materially participated. Substantial farmland is farmland which is equal to or greater than 30 percent of the median county farm size or which has a fair market value of greater than $125,000. An individual may have leased farmland or have been a tenant farmer and still be considered a beginning farmer. Land which a farmer disposed of while insolvent is not taken into account in determining whether a person previously had a direct interest in substantial farmland. How does the Beginning Farmer Program work? The Beginning Farmer Program involves a three-way transaction between the lender, the borrower and CADA. Because interest paid to the lender under this program is tax-exempt, the lender should be willing to charge interest rates substantially below commercial rates. The first step in getting a loan is for
