WEEKLY FARM: States trying to keep young people on the farm

WASHINGTON - Imagine Nebraska without any farmers.

While that is not going to happen anytime soon, government officials are alarmed that fewer and fewer young people nationwide are going into farming, either because they do not want to or cannot afford it. To stem that decline, tax incentives and other new programs are under consideration.

''The capital is the biggest hang-up, then finding the land,'' said Ryan Fisher, 29, of Amherst, Neb.

The number of farmers age 25-34 peaked in the 1980s and has fallen since then, according to a new Agriculture Department report. In 1985, producers under 35 accounted for 25 percent of all farmers. Now, it is 15 percent, and the median age of the nation's farmers has risen from 48.1 to 50.1.

Nebraska, with 55,000 farms, has fewer than 1,000 producers under 25 and about 5,500 under 35.

''Clearly, farmers must sense a comparative shortage of young colleagues, given this degree and rapidity of change,'' the USDA report said.

The public should be concerned because there will be fewer producers managing larger and larger operations, which could threaten the environment, said Mike Duffy, an economist who directs Iowa State University's Beginning Farmer Center.

''There's more to it than just having some American gothic here on the hillside'' he said.

Low-interest loan programs started in the middle of an economic crisis in the 1980s have not reversed the decline. Some states now are starting mentorship programs for beginning farmers and offering incentives to retiring farmers to rent or sell their land to young producers.

Beginning next year in Nebraska, retiring farmers can get a credit against their state income tax equal to 5 percent of the rent they charge a beginning producer. A farmer who rents out 200 acres of cropland at $50 an acre would get a tax credit of $500.

''We're hoping this will help us get our foot in the door. It's a little extra incentive for someone to work with us,'' Fisher said

He and his brother Brad are raising corn, soybeans and beef cattle on 500 acres of land that was homesteaded by their great-great-grandfather in 1886. They need at least twice to four times that much land to be profitable, however, and both men took full-time factory jobs to save enough money to buy more acreage.

Already, they have purchased $120,000 worth of used equipment, including a combine. They do the farming on weekends and in their off hours.

Their problem is finding someone willing to sell or rent them land. Better financed, more established farmers have an edge both in bidding for land for sale and in getting landowners to rent to them, said Ryan Fisher, who has a degree in animal science from the University of Nebraska.

The brothers bid $800 an acre for 240 acres of nearby pastureland recently only to have another farmer offer $850.

In other states:

-Michigan legislators are considering a similar program to Nebraska's and recently eliminated a provision in state law that caused property taxes to jump - in some cases as much as 49 percent - when farmland was sold or transferred.

-Minnesota is starting a farm apprenticeship program this fall for high school students.

-A network of universities, state agencies and farm groups that includes Iowa State, Cornell University in New York, the Ohio Farmers Union and the Michigan Farm Bureau is helping beginning producers find older farmers who will help them get established.

The Agriculture Department formed an advisory committee last year to make recommendations for assisting young farmers.

Federal inheritance taxes have been blamed by Republicans and some farm groups for the decline in young farmers, but Duffy said that is seldom a problem for most farm families.

The bigger problem is that older producers do not make plans for a successor to take over their farms, Duffy said. The land often gets divided up by the squabbling heirs and is sold to neighboring farmers, he said.

A survey of 581 Iowa farmers found that only 29 percent had identified someone to take over the operation and only 45 percent had an estate plan.

''They need to think about what they want. Is the farm a business that they've built up that they want to continue or isn't it,'' Duffy said.

A 1997 law gives family-owned businesses and farms an exemption of up to $2.6 million per family this year, compared with $1.3 million for other estates. They also can take advantage of special reduced-value rules for estate purposes and defer tax payments for up to 14 years at low interest rates.

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On the Net: Iowa State's Beginning Farmer Center: http://www.exnet.iastate.edu/pages/bfc