Small Town News

Delaware young farmers program a first in nation

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Kee: Loans of up to $500, 000 possible

Over the past 30 years, Agriculture Secretary Ed Kee has watched young farmers struggle to purchase land and equipment to get started in one of the oldest

traditions in the country - farming.

It can be difficult to begin building a future on the sandy soils of Delaware, but it is a future that many hold close to their hearts here, Kee said.

"There have been a lot of conversations over the years, and I've probably had three decades of input from all perspectives on

how to get young farmers going," Kee said. "Last summer we sat down and came up with a scenario - a mechanism - to help young farmers. We ran it past the governor and he liked it."

Just two weeks ago, Gov. Jack Markell joined Kee in announcing the restoration of funds to the farmland preservation program in the amount of $10 million. Out of that, $3 million will be set aside to create the new young farmer program.

"There are other young farmer programs around the country, but they don't really provide the funds. They are educational or provide guaranteed loans," Kee said. "This is the first program of its kind nationwide that invests public money, so the start-up costs for the young farmer are diminished."

While details and regulations are still being ironed out, Kee envisions offering an interest-free or minimum-interest loan to young farmers. The loan can cover up to $500, 000 of the purchase price of land. Any cost above that would be covered by the young farmer or by anotiier loan from a lending institution.

"The young farmer gets a

chance to start farming and he gets some generous terms," Kee said. "The payoff for the state is the land becomes permanently preserved. That's what is unique with this program and makes it the only one of its kind in the country."

The young farmer must meet other conditions: Farmers must be between the ages of 18 and 40 and willing to purchase a minimum of 15 acres. They cannot have a net worth of more than $300, 000, Kee said.

In the past two weeks since the announcement, Kee's office has received nearly 10 calls on the program. While he is keeping information on the callers, Kee said the program will likely not be ready to accept applications until the fall.

"It's important to understand we are working with the Legislature to fund the program and that doesn't really become official until June 30," Kee said. "Legislation being drafted in the agriculture committee has to move through both the House and the Senate. We are drafting that legislation now."

Responsibility for the program will remain with the Delaware Department of Agriculture in the farmland preservation section, which will administer the program and make sure it runs the way it should, Kee said.

"The program will also work closely with the lender used by the participant to determine credit worthiness and that the

business and repayment plans are adequate," Kee said. "The money will really funnel through the participant's bank or lending institution."

With the initial $3 million, Kee is not sure how many participants will be accepted into the program in the first year. The young farmers who are accepted will have generous terms and the possibility of a five-year grace period before the first repayment is due. Kee hopes the program continues long into the future, possibly using interest generated on the initial funding and later, repayment money from participants.

"The money is a loan, so it will come back as a slow return over time," Kee said. "We anticipate enough interest that every quarter we will be able to make decisions on who gets to participate."





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