According to the old saying, getting started is half the battle, but if you know where to look for assistance, getting started in farming may be a little less daunting.
The Wisconsin Department of Agriculture, Trade and Consumer Protection says there are programs available to help new farmers get going and guide existing farmers through a generational transition in ownership. A good place to start is DATCP's Wisconsin Farm Center.
"The Farm Center staff can carefully guide farmers through the transition process by helping a farm family create a business plan and determine if the new farmer can make the operation successful," said DATCP Secretary Ben Brancel. "We can also point out certain financial tools they may not know exist."
Tax credits available
For example, there is a Beginning Farmer tax credit. This one-time credit equals the amount the beginning farmer pays to enroll in a financial management program during the claim year. The maximum credit allowed is $500. To take advantage of this credit, the beginning farmer needs to have successfully completed the coursework. Then, both the beginning farmer and established farmer must apply to and be approved by DATCP. The application includes a proposed business plan, description of the beginning farmer's education or training, a written copy of a lease with duration of at least three years, and a description of the leased assets. A Beginning Farmer is defined as someone who has farmed fewer than 10 of the previous 15 years and has a net worth less than $200,000.
A Farm Asset Owner tax credit can be claimed by the established farmer. This amounts to 15% of the lease amount the beginning farmer pays to the established farmer and can go against such depreciable items such as machinery, equipment or facilities. Examples would be tractors, milking barns or irrigation tools. Land is not considered to be a depreciable item. This credit can be claimed for the first three years of a lease. Again, an application must be made to and approved by DATCP. An Established Farmer is defined as someone who has farmed for at least 10 years and owns agricultural assets.
Transitioning a farm from one generation to the next can be a tough time for all involved, financially and emotionally.
"Each situation is different and unique but the Farm Center experts have the experience and the knowledge of farm operations to help make these transitions go smoothly," added Brancel. "They are dedicated to keeping people in farming and growing Wisconsin's leadership in agriculture."
For more information about farm transition services or how to apply for the Beginning Farmer and Farm Asset Owner tax credits, contact DATCP's Wisconsin Farm Center at 1-800-942-2474 or firstname.lastname@example.org.