For next generation of farmers, first step can be hardest — finding land

Across his home state of Wisconsin, Rep. Clint Moses says, “there’s a lot of young people who would love to get into farming and would love to know about acreage that comes available.” A part-time beef producer, Moses himself has been interested in acquiring more land.

But among the obstacles for the aspiring next generation of agricultural producers: the limited amount of acreage that becomes available, as well as a lack of knowledge of when it does.

Rep. Clint Moses

Moses believes the state can help by creating a farmland link program within the Wisconsin Department of Agriculture, Trade and Consumer Protection. Under his proposed AB 411, the program would connect landowners with individuals seeking land exclusively for agricultural use. Its primary feature would be a publicly accessible website listing farmland available for sale — similar to the Multiple Listing Service used for residential real estate.

Yes, Moses says, nonprofit organizations currently offer farmland listing services, but many are limited to members or have niche audiences. Beginning farmers, along with individuals looking to expand operations, need a more comprehensive, widely accessible resource, he believes.

More generally, too, these producers can struggle with land access — across the states of the Midwest.

In Iowa, results from a Iowa State University 2022 survey of farmland owners reflect the challenge of intergenerational, non-familial transfers of land. Farmland owners were asked: Are you willing to sell your land to beginning farmers? While 82 percent said “yes,” the respondents expressed concerns about finding competent buyers and receiving fair market value.

And results of the same survey found that only 4 percent of Iowa farmland would be made available to a non-family member.

Land locked

Helping potential buyers connect with sellers is one strategy for improving beginning farmers’ access to the limited amount of land that becomes available. States also are trying to address a more fundamental challenge for young producers: insufficient capital to purchase increasingly expensive farmland and a lack of resources to become economically viable.

Rep. Norine Hammond

In Illinois, legislators have created a new commission (SB 2372 of 2025) to identify state policies that help individuals ages 21 to 40 access or acquire farmland. The commission must include legislators, younger farmers, and state agency and industry leaders.

Although the group was still being formed as of early 2026, Illinois Rep. Norine Hammond says, banking and credit access are expected to be central to its work, as lenders remain hesitant to finance beginning farmers.

For decades, states have relied on a mix of their own laws, as well as partnerships involving federal, private and nonprofit groups, to ease access to financing. This includes specialized loan programs and tax policy, some of which have been expanded or tweaked in recent years.

Specialized loan programs

Across the country, the U.S. Department of Agriculture Farm Service Agency (FSA) provides lending support to beginning farmers, operators recovering from financial setbacks, and producers with viable business plans but limited collateral.

In fiscal year 2024, the agency made 24,555 loans totaling $5.39 billion, with roughly 80 percent of these funds flowing to the 11-state Midwest. However, FSA lending represented only a small share of the $388.7 billion in agricultural loans issued by the Farm Credit System and commercial farm banks that year.

Eight Midwestern states supplement federal FSA loan programs with Aggie Bonds: federally authorized, state-administered bonds issued in partnership with private lenders. Aggie Bonds allow investors’ interest earnings to be exempt from federal, and sometimes state, income taxes. As a result, lenders offer first-time farmers loan rates averaging 1 to 3 percentage points below commercial farm loan rates, according to the Council of Development Finance Agencies.

The use of Aggie Bonds, though, is inconsistent, and usage is low relative to availability. Issuance was $33.3 million in 2014; it rose to $92.9 million in 2018 and fell to $39.5 million in 2023. The council attributes this decline to program requirements that no longer reflect economically viable farm sizes.

Illinois, Iowa, Kansas, Minnesota, Nebraska and North Dakota pair Aggie Bonds with additional state programs that expand access to capital and reduce financing costs. These programs may help farmers restructure debt, finance farm improvements or provide direct down-payment assistance.

For example, Minnesota operates a debt restructuring program through its Rural Finance Authority to assist farmers experiencing cash-flow challenges due to adverse events. Farmers apply with their lender, and, if approved, the Rural Finance Authority purchases up to 45 percent of the loan.

Wisconsin and Ohio have operated state-based loan programs for more than 30 years without relying on federally supported Aggie Bonds. Wisconsin’s Housing and Economic Development Authority guarantees loans from commercial lenders for the purchase of machinery, equipment, buildings, land or livestock. Ohio’s Ag-LINK program offers a 3 percent interest rate reduction on new or existing operating loans for farmers, agribusinesses and cooperatives.

Tweaks in tax policy

Over the past five years, state and federal policymakers have turned to tax policy as a tool to expand access to agricultural and rural lending, particularly by lowering lenders’ tax obligations.

In 2021, the Kansas Legislature enacted SB 15, a measure that allows qualified banks to deduct net interest income from agricultural real estate and rural single-family residence loans from their state taxable income. Similarly, Wisconsin legislators (SB 70 of 2023) gave qualified financial institutions the option of excluding interest income on commercial and agricultural loans of $5 million or less to in-state borrowers.

At the federal level, a provision in HR 1 of 2025 allows banks to exclude 25 percent of the interest earned on qualified real estate loans from gross income. Qualified loans include those related to agriculture. Unlike Aggie Bond programs, HR 1 does not require lenders to pass on the tax savings to borrowers.

State tax credits

Recognizing the barriers created by high land values and limited purchasing opportunities, Iowa, Minnesota, Nebraska and Ohio have adopted tax credit programs to support beginning farmers.

Nebraska launched its program in 1999 and, through 2025, had provided $19.7 million in credits. Ohio’s program is the newest of the four; it began in 2022. These initiatives generally offer tax credits to established farmers who lease or sell agricultural land or equipment to qualified beginning farmers. Common program features include:

• limits on beginning farmers’ net worth;
• requirements for beginning producers to participate in farm management education;
• stipulations on transactions involving family members; and
• higher tax credits for crop-share leases (which spread risk between landowners and operators) rather than cash leases.

Rebecca Leis is CSG Midwest staff liaison to the Midwestern Legislative Conference Agriculture & Rural Affairs Committee. Nebraska Sen. Teresa Ibach and North Dakota Sen. Paul Thomas serve as committee co-chairs. Minnesota Sen. Robert Kupec and Illinois Rep. Bradley Fritts are co-vice chairs.