MARBIDCO programs offer financial options

Brittanie and Andy Collier used the Next Generation Farmland Acquisition Program of MARBIDCO to purchase Hidden Acres Farm in Trappe, Md. (Photo courtesy MARBIDCO)

ANNAPOLIS, Md. — The state of Maryland has several financing programs available for beginning farmers. Two of these programs are provided through the Maryland Agriculture & Resource-Based Industry Development Corporation (MARBIDCO): the Next Generation Farmland Acquisition Program and the Small Acreage Next Generation Program.
Two officials with MARBIDCO — Stacy Kubofcik, senior programs officer, and Allison Roe, financial programs officer — discussed aspects of these two programs for beginning farmers.
They explained that both of these Next Gen programs are aimed at farmers who do not currently own a farm or a ranch (or own one that is less than 10 acres in size); have at least one year of experience in agricultural pursuits, but no more than 10 years of farming experience; are seeking to acquire farmland in Maryland; and expect to substantially participate in the farming operation on the subject property.
The Next Generation Farmland Acquisition Program focuses on farms that are 50 acres or larger; the Small Acreage Next Generation Program targets farms that are between 10 and 49 acres in size.
In the farmland acquisition program, MARBIDCO provides funding to farmers in amounts up to 51 percent of the value of the farmland (up to a maximum of $500,000), they stated.
A farmer is able to utilize the funds as a down payment to purchase farmland.
The funds are designated to temporarily place a land conservation easement on the entire farm.
They noted that a participating farmer has seven years from the date of real estate settlement to sell the land conservation easement to another entity that will permanently preserve the farmland. That other entity can be a governmental unit or a non-profit organization.
When the land conservation easement is purchased by another entity, MARBIDCO is paid back the full amount it lent to a farmer plus 3 percent of that amount; the additional fee is used by MARBIDCO to help cover its administrative expenses. The participating farmer is able to keep any sale proceeds beyond the amount borrowed from MARBIDCO and the administrative fee.
If a participating farmer is not able to sell the permanent land easement within the designated time period, Kubofcik and Roe said that the corporation will move to make the temporary land conservation easement into a permanent one through an entity designated by MARBIDCO; no additional funds are provided to the participating farmer.
In the small acreage program, MARBIDCO provides funding to farmers in amounts of between 40% to 60 percent of the value of the farmland.
“Those funds are used for two purposes — the farmer uses the funds as a down payment to purchase the farmland and a permanent land conservation easement is placed on the entire farm at settlement,” Kubofcik and Roe said.
MARBIDCO is a quasi-public financial intermediary organization that works cooperatively with commercial banks and a host of Federal, state, regional, and local government agencies as well as the University of Maryland Extension to deliver more than a dozen financing programs.
The Next Gen programs, according to MARBIDCO, “…addresses two key challenges: 1) Helping young or beginning farmers obtain financing for the purchase of farmland; and 2) Helping to secure a viable future for Maryland’s agricultural industry by preserving working farm and forest land for future generations.”
“MARBIDCO has $2.5 million available to distribute to select ‘Next Gen Farmers’ during the upcoming fiscal year (at the time their new farms are being purchased),” the corporation noted. “The selection for participation in this program is on a competitive basis.”
There is no specific target area within the state.
The representatives of MARBIDCO indicated that 36 farms have participated in the Next Generation Farmland Acquisition Program, and 4 farms have participated in the Small Acreage Next Generation Program. Farms in 14 counties have participated in these Next Gen programs.
One of the success stories cited by MARBIDCO is Hidden Acres Farm.
“Brittanie and Andy Collier always knew they wanted to own a piece of land to operate and to raise kids on,” according to a feature detailed in the 2018 Annual Report of MARBIDCO. “For over five years they searched for an affordable property when they heard of MARBIDCO and the new Next Generation Farmland Acquisition Program, or the Next Gen Program. Using this program, the Colliers purchased Hidden Acres Farm in December 2017 in Talbot County.”
In the feature, Brittanie said it wouldn’t have been possible for us to purchase this farm without the farmland acquisition program.
“It’s nice to see a program out there for young farmers trying to start,” said Andy.
On Dec. 28, the Eastern Shore Land Conservancy announced it had closed on a conservation easement with the Collier family.
“The easement on Andy and Brittanie Collier’s 123-acre farm protects 84 acres of productive agricultural ground, 60 acres of which is considered prime farmland,” the conservancy said in a statement. “In addition, the easement protects 35 acres of woodlands that support Forest Interior Dwelling Species of birds, a declining species group that includes many woodpeckers and thrushes.”
Kubofcik and Roe said one of the biggest challenges in these two Next Gen programs is timing; it typically takes more time to go through the various processes required for the programs as compared to “regular” real estate transactions. MARBIDCO recommends that a beginning farmer seek a real estate closing date that is scheduled at least six months in the future.
Detailed information on the Next Gen Programs of MARBIDCO can be found at www.marbidco.org.