Ohio agriculture has a problem.
The state’s farmers are aging and increasingly looking to retire. But aspiring farmers often can’t break into the field, unable to afford the steep cost of land and equipment to get started.
Trevor German knows these struggles first-hand. His family has owned a farm in northwest Ohio for more than a century.
“It goes back many generations to my great grandparents and great great grandparents,” he said.
But despite his family history, for a long time, German wasn’t certain he’d be able to continue the farming tradition.
He’s not guaranteed to inherit his family’s land. His mom and her siblings are first in line, and he has other cousins. Even if he does, the farm likely wouldn’t be enough to support him. It’s pretty small for the area, German said, and it produces enough money to sustain just his grandfather, who had to work other jobs on top of the farm throughout his career to support his family.
If he doesn’t inherit the land, the cost to start a new operation is daunting.
“Farming, as any farmer knows and anybody around agriculture knows, is incredibly capital intensive,” German said, inside a garage full of high-tech tractors, planters and drones. “I always knew I wanted to be involved in agriculture in some way, shape or form. Just financially, I never knew if it was quite feasible to come back to the family farm.”
German is in a better position than many aspiring farmers. He has the chance to inherit land, and was raised around a culture of agriculture. But even with those advantages, he might not be able to achieve the dream of farming full time.
The Beginning Farmer Tax Credit Program
Last year, however, a new Ohio program put that dream a step closer to fruition: the Beginning Farmer Tax Credit Program.
That program requires beginning farmers like German to take a financial management course. The state gives them a tax credit to pay for the class, but it doesn’t actually give them a tax break to purchase land.
The seller, however, does get a tax credit of 3.99%, if the buyer, like German, has taken the course. That incentive is essential, because the seller would otherwise likely sell to a higher bidder.
German was the first person to use this program and it enabled him to buy 20 acres of land. Now he can farm that land and help out on the family farm until his grandfather is ready to step back.
“Around here, ground doesn't come up for sale very often,” German said. “And if it does, it's usually a ‘who can write the biggest check’ kind of game. But this tax credit enables the smaller farmers, such as ourselves and the people trying to get into it, a way to get in that conversation.”
He’s not the only farmer to feel this way. Nathan David also bought land through the Beginning Farmer Tax Credit Program.
He doesn’t come from a farming background, and says without the program, buying land would have been a bigger struggle.
“It was a pretty good bargaining chip,” he said. “It gave the sellers an incentive to sell to us at a price that we could afford.”
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Categories: Ohio, Business