BROOKINGS, S.D.(KELO-AM) - The South Dakota Value Added Finance Authority (VAFA) approved three Beginning Farmer Bond applications totaling almost $1.5 million at a meeting on Thursday, Feb. 27, in Brookings.
The Beginning Farmer Bond program through the SDDA is available for eligible beginning farmers or ranchers to purchase agricultural land at lower interest rates.
“To be eligible for the program, an applicant must be at least 18 years old, a resident of South Dakota, have a net worth under $400,000 and own less acres than 30 percent of the county median,” says Terri LaBrie, finance administrator for SDDA. “The limit on a beginning farmer bond is $509,600.”
Typically, the Beginning Farmer Bond program works through a local lender. However, if retiring farmers are interested in passing on their land to a beginner farmer, the interest off that contract sale is federally tax exempt, providing substantial savings to the seller.
Unfortunately, there are regulations prohibiting this type of transaction with closely related parties such as parents or grandparents.
“The bond program is a great way for a beginning farmer to buy land. However, it’s also advantageous for a retiring farmer that would be willing to enter into a contract for deed or an individual investor looking to help finance a beginning farmer,” says LaBrie.
The SDDA administers this program through VAFA. The board meets monthly and reviews the applications and issues the bonds for approved projects. Board members include: Bob Hull, Sisseton; Mark Gross, Sioux Falls; Bill Hansen, Centerville; Chuck Jepson, Ft. Pierre; Jim Doolittle, Belle Fourche; Marcia Hendrickson, Chancellor; and Nathan Jensen, Beresford.
For information on the financial programs offered through SDDA, please contact one of the board members or Terri LaBrie at 605.773.4026 or terri.labrie@state.sd.us.
Agriculture is South Dakota's No. 1 industry, generating over $21 billion in annual economic activity and employing more than 122,000 South Dakotans. The South Dakota Department of Agriculture's mission is to promote, protect, preserve and improve this industry for today and tomorrow. Visit us online athttp://sdda.sd.gov or find us on Facebook at https://www.facebook.com/SDAgDept and Twitter @SDAgriculture.