I asked farmers and farmland owners for their thoughts on whether it is important for beginning farmers to own farmland. Their responses were diverse and thoughtful; the following contains a sampling of their feedback.
“Land ownership must eventually be part of the package of farming, so a farmer can put up buildings and infrastructure to support production and build equity in an appreciating long-term asset.
“However, it is better to have secure land tenure of buildings and adjacent farmland (even as a rental-only situation) rather than ownership of a small acreage without possibilities of expansion down the road. We are very grateful to the family members who agreed to rent us land and a farmstead to start our farm business. We don’t have to tie up money in a mortgage on land or a house right away, so we can afford to take on the business debt of an operating loan for machinery and equipment. Our goal is to get our business established, gain skills, prove ourselves and our markets first. Someday, if we are able to buy land either down the road or across the county, we will have a track record of paying the annual rent bill on time that could help show a banker we have an ability to repay a mortgage.”
“My husband and I would have a very hard time justifying buying our farm at its current appraised value. We’d also have a very hard time justifying how hard we’ve worked over the last eight years of farming if we didn’t have at least some of the wealth from the appreciation of the value of our farm. Generally speaking, farmers should probably try and buy at least some of their land, except when land prices are in an unsustainable bubble because the farmers are going to need to have their land appreciate in order to experience wealth creation.”