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New USDA Program Available in Ohio Hopes to Address Farm Transition Issue

Transition Incentives Program aims to help new and disadvantaged farmers obtain land.

The Farm Bill’s new Transition Incentives Program (TIP) is now available in Ohio.  The addition to the Conservation Reserve Program (CRP) will provide rental payments to transition CRP land from a retired farmer to a beginning or socially disadvantaged farmer who returns the land to sustainable production.  TIP received $25 million in funding from the 2008 Farm Bill.  Program supporters hope the funds will enable beginning and socially disadvantaged farmers to obtain affordable land for agricultural production.

Here’s how the program will work:

  • The CRP landowner must be a “retired” or “retiring” landowner.
  • The CRP contract must expire on or after September 30, 2010, but there is an exception for certain contracts that expired in 2008 and 2009. 
  • The landowner must enroll all or a portion of the CRP land in TIP by the enrollment deadline.   Contracts expiring in 2010 and eligible 2008 and 2009 contracts must be enrolled by September 30, 2010.  Later contracts must be enrolled during the last year of the contract.
  • The new or socially disadvantaged farmer or rancher must develop a conservation plan for the TIP land.
  • By October 1 of the CRP contract expiration year, the landowner must agree to sell or lease (for a minimum of five years) the land to a non-family “beginning” or “socially disadvantaged” farmer or rancher and must allow the farmer to make improvements on the land in accordance with the approved conservation plan.
  • The beginning or socially disadvantaged farmer must return the land to production using sustainable grazing or crop production methods.
  • The beginning or socially disadvantaged farmer will be eligible to enroll the land in continuous CRP, Conservation Stewardship Program or Environmental Quality Incentives Program, with a waiver of the provision requiring 12 months of continuous ownership.
  • The landowner will receive up to two additional CRP annual rental payments if all TIP requirements are met.

A few important definitions:

  • A “retired or retiring” owner is one who has ended active labor as a crop producer, or plans to do so within five years of the TIP arrangement.
  • A “new or beginning farmer or rancher” is one who has been farming for less than ten years and who will materially participate in the operation of the TIP land.  If an entity, at least 50% of the entity’s members or stockholders must meet the ten year, material participation requirements.
  • A “socially disadvantaged farmer or rancher” is a member of a group that has been subject to racial or ethnic prejudice.  Examples include American Indians, Alaskan Natives, Asians, Asian-Americans, Blacks, African Americans, Hispanics.  Unlike other federal programs, this definition does not encompass gender prejudice; hence, women do not qualify as socially disadvantaged for purposes of the TIP program.

A few questions arise when considering whether there will be interest in TIP.  Are there sufficient incentives for the CRP landowner to transition the land, are there connections between CRP landowners and beginning or socially disadvantaged farmers, and how will the rental payment affect the purchase or lease price for the land?  Ohio will soon have an indication of program interest, with the first enrollment deadline of September 30, 2010 quickly approaching.

For more information on TIP, visit the FSA site.

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