VERNON ACHBNBACH JR. Lancaster Farming Staff CAMP HILL (Cumberland Co.) An educational forum for those with forms who would like to provide an opportunity for the next generation to farm was held last week at the headquarters of the Pennsylvania Farm Bureau, in Camp Hill. The educational forum, basical ly a retiring farmer's seminar, was jointly sponsored by the PFB and the Pennsylvania Farm Link Program a program created and supported by the state General Assembly that is designed as a match-making agency for those attempting to enter farming and those with no heirs or no heirs instrested in continuing the family farm. Although justa little more than a year in operation, the Bum-Link Program marked the first success ful link-up of a Westmoreland County farm owner and an enter ing fanner on the day of the semi nar, with the cows being moved that day, said Marion Bowlen, coordinator of the program. As of the seminar, she reported that she has received 320 inquiries from people desiring to be consid ered as entering farmers, and SO from farmers looking to retire. What Bowlen does to carry out the program is take the information from each entering farmer and put information about them on a com puter list She also obtains infor mation from those with farms will ing to participate, though that information is not shared with potential entering farmers, or any one else. Through the use of the data base, Bowlen then attempts to match people with similar farming interests, and then supplies those with farms with the names of potential entering farmers. Those with hums make contact with those on the list and take it from there, with support, as needed, from Farm-Link. The support structure for the program is deep, and help is pro vided to take advantage of any.ini tiadve programs available, loans, etc. Also, both sides are counseled on the realities of developing a working relationship between the two sides. In short, while the goal of the program is to try to offset the attri tion of family farms in Pennsylva nia, the method is to match people to see if they can develop a mutual ly agreeable agreement on trans ferring the farm. The goal of the program is to Mlanco CONCRETE WALLS WE DO SCS WORK-ALL TYPES OF PODRED WALLS • Retaining Walls • Bunker Silos • Manure Pits (circulsr or rectsngulsr) • Slatted Floor Deep Pits • Footers * Flstwork CONTACT STEVE PETERSHEIM, JR. p.O. Box 256, Blrd-ln-Hand, PA 17505 717-291-4585 • (PAX) 717-291-4686 Farm Link, PFB “squeeze mote people into agricul ture, not less,” she said. About 40 people attended the program with some couples travel ing relatively long distances to attend. Bowlen began the program, introducing herself and explaining that she and her husband own and operate a Lancaster County beef cattle farm that had been her grandparents’ farm. Her father, 75. is still farming, she said. However, to the point of the program, she stated facts which further support oft-repeated trends about the farming sector the number of farms is declining at a rate of about 1,000 per year, 55 percent of independent family farms have been lost since 1960; about half of those currently farm ing have to work off the farm to make ends meet; 65 percent of farm families live off of $40,000 per year, or less; and there is a decrease in new starts in farming. “The young are difficult to get in to a farm,” she said. A big prob lem, she said, is that without the promise of eventually getting a farm, most young couple are not willing to farm as a livelihood. Stating more statistics charac terizing the current farming situa tion, she said that the average age of a Pennsylvania former is 52.2 years: and that for every farmer under 35 years old, there are 2.2 people aged 65 or more forming. Bowlen explained the question naires that potential entering and retiring farmers are asked to complete. For the owners of a farm, the information requested is specific in terms of the form itself, zoning, legal restrictions, machinery, what land of business enterprise has been conducted, what kind of farming practices have been used (some farmers have spent a life time improving forms and risk all that work being destroyed if they allow their property to be disper sed in the settlement of their estate), debt-ratio, and similar types of pertinent information. The entering farmers are asked questions about their goals, back grounds and references are required. They should have some experience farming, and currently those who have filled out question naires range in experience from none to 10 years, with one person actually have 24 years experience fanning and looking for a farm to call home. It’s not a panacea, and it’s not going to be all easy, she said in effect, explaining that a successful transfer of the farm depends most- Offer Help Transferring Farm ly on the personalities of the pco- an entering fanner include prior pie involved. business relationships that enter- That is why the Farm Link prog- fog farmer may have had: the ram attempts to sift through all the amount of trust; references entering fanner candidates for the whether the entering fanner has a farm owners, and allow the farm developed business plan that owners to select and contact the makes sense, especially if the retir people with whom the farm own- fog farmer is acting as the lender, ers think they might best develop a instead of using a commercial len successM realtionship. dcr (interest rates ate still neces- She said most of the entering wry. but perhaps not as high, and fanners come in with beginning* fo crc a fewer restrictions noces farmerequity meaning Utdecash as a bank may require); the assets, but with the strength health amount of professional financial and durability of youth. “Some support that may be needed; and have been woridqg (off the farm), the compatibility of the people and have cash,” she said. Most are involved, looking for, and need, an older far- Heim said that those with farms mw to serve as a mentor.” who are interested in seeing the To date, most of those interested next generatidh continue the farm in participating in the program must be ready to deal with disap have been dairy fanners and a few pointment He said very few pi beef operations While vegetable. pte farm exactly the same, or make fruit and diversified operations 01 exactly the same decisions, and if ruche farming operations can make farm owner i sn ’t willing to tqi die remainder. allow the entering fanner to make The bottom une for all fanners, decisions, the arrangement won’t mote interested in passing on the work; however, there is risk to the farm to the next generation or not, form owner if decisions by an ia that “Everyone should consider enterin g f armer are never transferring the farm before get- questioned, ting into the situation (where the it’s a hth'Ky- that can may farm has to be sold) ” stressfill at he said. * p»e successful arrangement she Of the legal aspects, farm own told the group about, came about eis should look at actual invento aftcr several meetings between the nes and supplies, machinery, two, with program support and livestock, fixtures, teal estate, and moderation. She said that the retir- other tangible properties on the ing farmer in that situation told her form decide how they are to be that for the first lime, in a long with time, he’s gotten excited about Each aspect of the existing farm farming again. “Neither is wealth- an d form operation should be ques y. but they have agreed to work ti oned as to whethe r it w ui be to Bf® er - , needed by the entering farmer, it’s What is needed, Bowlen said, is value, and whether it will be sold honesty and compatibility. or rented, and possible terms of ost people transfer of tangible properties, have difficulty foreseeing a time As far as operating arrange when they will no longer be farm- men tB, Heim said that there is no mg. she said. The time to start such thing as “the right way.” preparing for getting out of farm- instead, it is something that must m B* s * on B before it happens. be discussed in detail and with. The key to success in tranferrmg complete realism, and it is some a farm is to understand that retire- thing that suit each party, ment is gradual and that owning He discussed a variety of the farm is gradual. arrangements of roles between the It s not really f«r to expect [ mn owncr and foe entering far somcone to buy aU tte equipment, mer> such as i an dl 0 rd/tenant, land and assets of a farm at once, seller/buyer, and lender/borrowcr she said. First, it took a lifetime to a nd how these roles change over accrue all those assets, and second- time, as the next generation gradu ly. the profit margins are tight and ally over farm fesMf any, lender would consider He also bussed joint opera supporting such an all-at-once tions and the types of partnerships >? Ut ’ n ■ or corporations which may be Gary Hcun, an attorney who formed, though these aren’t neccs wraks with PFB in help farm trans- sar jy cons idered applicable to the fers and with their estate planning nonfamily generational transfers services, also talked and went over 0 f farms, the aspects of transfers to a common relationship in , . dairying is starting off with a dairy/ The non-legal aspecte for retir- fo farm responsibiU mg farmers to consider in selecting v FOR SALE FORD NEW HOLLAND K-LINE ELECTRIC TRAIN wKTBBBBHII- i '?'••:• - m "■f '*ljsisik' -•* * * ’*■ = ———— CABOOSE BOXCAR ENGINE 0/027 Gauge (7” long) 0/027 Gauge (91/2" long) 0/027 Gauge (11" long) Die Cast Wheel* Die Cast Wheels MPIS Dual Motor • Train ready to run - track and transformer NOT included • All train cars are painted with the Ford New Holland colors (white with red and blue) and are highly detailed. • Future intentions consist of flat cars mounted with miniature Ford New Holland equipment. Purchasers of this 3-piece set will be notified of future train pieces. • This is a Limited Edition train set and available while supply lasts. The cost of the Engine - Boxcar - Caboose set is $200.00 plus $7.75 S/H by UPS. Pa. residents add $12.00 for sales Jax. Not sold individually. Make check payable to Paul Good and mail to 717 New St. Akronr PA 17501 Any questions, call (717) 859-1673 evenings UncMter Farming, Saturday, April 8, 1995-A29 ty, with the younger tanner gener ally opting to manage the hod and milk cows, while the older genera tion farmer does field work. Heim also talked about the different splits of the milk check and how that changes as the transfer of own erships occurs over time. The seller of a farm has to con sider liens and the title of the prop erty, die purchase price, financial arrangements between the seller and buyer, taxes, default remedies, environmental aspects such as underground storage tanks and old dumps (every farm has one), etc. “It has to be a fair arrangement,” Heim said, “otherwise, you will create a legal arrangement that will blow apart” A considerable amount of dis cussion during the seminar was given to tax-free gifts. It was explained that currendy, every year, each person is entided to give away $lO,OOO tax free. Also, once a lifetime, every per son is entitled to give away $600,000 tax free. The two are different The $lO,OOO per year allowance is an annual entitlement The $600,000 is per person and considered as an “end-of-lifc” arrangement For example, if a couple decides they would like to give their farm to their children, they have the combined ability (check with a professional advisor for specifics) to give them $1.2 million tax free. Theslo,oooperyearis separate and does not accumulate over time. However, if during a given year, mote than $lO,OOO has been given in gifts, it can still be claimed as a tax-free gift, but any amount over $lO,OOO is deducted from the end of-life $600,000. . As an example, if $ll,OOO were given as a gift, $lO,OOO would be the amount for the year, and not affect the $lO,OOO allowed for the next year. However, the $l,OOO over the allowable limit would be deducted from the end-of-life amount and the total end of life tax free limit would then be $599,000. Gifts were mentioned because they realistically have to be a part of many farm transfer scenarios to children or non-family. In other business, Cheryl Cook, with the former Farm Home Admi nistration, talked about beginning farm loan program available through the USDA, but she said that funds are limited. She said she has $23,000 to allocate to the beginning farmer program because of the way the U.S. Congress (Turn to Pag# A3B)
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