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The Dream Of Owning A Farm Is Out Of Reach In The Midwest Because Of Student Loan Debt

Allison Mollenkamp
Harvest Public Media file photo

Plenty of younger people are eager to build careers in farming, but more land up for grabs won’t necessarily make it easier to get started. Access to land and capital are two of the biggest hurdles facing first-generation farmers today, and some say they face an extra barrier to both — student loan debt.

With lawmakers and President Biden mulling the merits of canceling some debt, farmers and advocates say loan forgiveness could make it easier for millennial farmers to build their businesses.

“We know like good farmland is in rural areas, but there are not good jobs that can pay for all the student debt that you have in rural communities,” says Vanessa Garcia Polanco, a federal policy associate with the National Young Farmers Coalition.

The average American farmer is nearly 60, and many are starting to eye retirement. As a result, a significant portion of U.S. farmland is expected to change hands in the coming years. In 2014, the U.S. Department of Agriculture predicted ten percent of fields would transition ownership before 2019, a figure the American Farmland Trust estimated that over a third of fields would be passed to new owners by 2035.

A big investment

March will be a busy month for Cait Caughey, a first-generation farmer in southwest Iowa. She’ll spend hours planting in the tiny greenhouse on her front lawn, flanked by vast, muddy cornfields as far as the eye can see. 

But if all goes according to plan, they’ll finish growing in her biggest investment yet.

“Fingers crossed, we don't know what's gonna happen with the mud puddle nature of March and April, but the new greenhouse will be up, and I'll be able to move all of the larger seedlings into there,” she said, pointing to a roughly 30-foot plot behind the home. 

After starting the business in her living room a few years back, the construction feels like a big step up.

The land Caughey built her business on — and the cornfields around it— are owned by her landlord’s family, a group of longtime Iowa farmers. Lucky for her, Caughey says, she has a good relationship with her landlord, who supports the project. Without her permission, scaling up wouldn’t be possible.

Caughey has about $60,000 in student loan debt and can’t afford her own farmland. She says that’s just one way the loans loom over her life: in agriculture, land ownership means security. Losing the lease could end her career. 

“I know of younger farmers that have had longer leases, and those leases ended,” she lamented.

“The owner said, ‘No, I'm done, I don't see the value in what you're doing.’ or, “You have to go for XYZ reason.’ And you really, you're starting all over.”

She guesses buying the small plot of land her family lives and farms on — perhaps two acres total —  would cost at least $20,000, with much more added on top to build structures and a house. 

“It's just there's no way,” she deadpans. “Where can any of us come up with that kind of money, right?”

Steeper barriers

The National Young Farmers Coalition says Caughey’s story highlights the biggest challenges facing first-generation farmers today: access to land and money. Members have consistently ranked student debt as a top-three barrier to getting both.

A 2017 survey by the nonprofitfound that more than 80% had college degrees, but fewer than half owned all of their land. Polanco says beginning farmers of color can face steeper barriers, asnon-white students in the U.S. are more likely to have more student debt and struggle to repay it.

“For a student of color, any number is a hurdle because that will prevent you from building wealth and having access to the things that degree will open up for you,” she explained.

Plus, in many cases, she says, it can be hard to find agricultural communities where it’s possible to save up for farmland and pay off loans. More debt makes that problem harder to overcome.

Sarah Campbell at the USDA’sNational Beginning Farmer and Rancher Program says lingering debt can also make applying for farm loans more complicated. She helps farmers accessgovernment loans that are meant to be easier to get and payoff than those from private lenders. Interest rates are kept low, and the USDA doesn’t use common factors — like a credit score —  to pick who gets money.

While student debt may not disqualify somebody, it can make submitting required business plans more burdensome and even risky.

“Folks who are carrying student debt, it might be a pretty significant monthly payment. And so they've got to figure out how to kind of come up with that, and how that will factor into their capacity to repay,” Campbell said.

No assets, no future

Melanie Kirby descends from the Tortugas Pueblo tribe in New Mexico. She says her $100,000 debt — and a lack of generational wealth —  made her feel like she couldn’t apply to buy the land she needed to expandher beekeeping business, which she started in 2004. Along with selling honey, Kirby and her partner raise queen bees for other beekeeping businesses to buy for their hives.

She says the farm has only ever managed to pay for itself, while she and her partner made all of their living income from off-farm jobs.

“And that felt like a point of failure, that my farm couldn't make more money, and yet we sell out of everything we can produce every year,” she said. “What bank is gonna lend me money, especially in an industry that is challenged?”

Fifteen years later, Kirby still doesn’t have any retirement savings. Many farmers often sell off their land to fund their retirement.

She says for debt-strapped farmers — especially Black, Indigenous, and other people of color — the math often feels simple: no land, no assets. No assets, no future in the industry.

“They can't even dream or envision or feel that some of those things are within reach because they're struggling with day-to-day survival. It breaks my heart because we're in our ancestral homelands, and yet we're displaced.”

White farmers own 98% of U.S. farmland. With talk of possibly canceling some student debt buzzing around Washington, Kirby thinks any loan forgiveness for young farmers would likely diversify U.S. agriculture.

“I want to have something that I can offer my children, you know, whether they want to stick with it, or they can chop it up and sell it off and do whatever they want to do,” she trailed off. “But I don’t want to hand them crap on a platter, you know?”

Student loan debt is just one of many obstacles facing young producers. But with so much land coming up for grabs soon, she says the government is missing an opportunity to invest in the next generation of farmers.

Garcia-Polanco agrees but cautioned that writing off an amount of debt should be only part of addressing the loan crisis among beginning farmers. The National Young Farmers Coalition is currently monitoring some state programs —including one in Kansasproviding student loan repayment for those who move to certain rural counties — that show promise for lessening young farmers’ financial burdens.

Garcia Polanco’s team is also brainstorming ideas to lobby federal lawmakers on, including a role for the USDA in managing some student debt and giving farmers low rates similar to FSA loans. 

“If we don't have farmers ready, the land is gonna go to development or to foreign ownership or to consolidation, and those are the three main fears.”

Follow Christina on Twitter: @c_c_stella
Copyright 2021 Harvest Public Media.

Christina Stella
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