A plan set in the past helps beginning farmers well into the future

Dec 2, 2016  | 6 min  | Ep4215

According to USDA, net farm income has reached its highest five-year average, due in part to record prices in 2012. Today, the payout is decidedly lower than those drought infused years as net farm income is forecast to decline by 17.2 percent by the end of the year. The drop may have some pondering if it’s time to cash it in.

Another point in time when this question comes up is when land owners pass away. Family members must answer the question - Do you hold or fold? One farmer came up with a third alternative that involves an investment in the future. 

Launching a career in commercial agriculture can be a struggle for many. The deck is stacked against these future stewards of the land as they face high entry costs and limited lending opportunities in an ever changing economic environment.

Jenny Van Zante, Fremont, Iowa: “…it’s a big discouragement for your young farmers. So if they can get it get a leg up somehow or benefits from you know established farmers,  or farmers who start a trust, that's a huge benefit for the farm community as a whole.”

However, one Iowa farmer’s love of the land inspired him to help future generations of those just starting out. Almost forty years ago, Harold Darner, came up with a plan to help new farmers survive and thrive. With no family to take over his operation, Darner decided to place his land and house into a trust and gift it to those with a specific interest in tilling the soil.

In 1998, nearly thirty years after the will was written, the Darner Trust was set in motion. The trust, one of only a few known to exist across the country, contained extraordinarily specific conditions for prospective residents.

Brian Hawk, Senior Loan Officer, Bank Iowa: “...the bank was selected to be the Trustee and we are to administer the trust for 100 years. Leasing the farm to tenants for 5-year periods of time. And those tenants are to be young married couples with a true desire to make farming their life’s work.

The place where that “life work” starts is a 160-acre farm just south of Fremont, Iowa. The tenants, live in the former Darner home for free. They pay rent on the farm ground but at significantly reduced rates allowing the young farmers to save money for the future.

After five years, the lease is up for renewal, the trustees move on to their own farm and the application process starts all over again. This cycle will repeat fifteen more times until 2098 when the farm will be donated to the University of Iowa.

Brian Hawk, Senior Loan Officer, Bank Iowa: “We actually put in the ad in the local newspapers advising the public that we are in the process of taking applications for this opportunity. We then we'll screen all of those written applications through a local trust committee of four people and then we make a very difficult decision at the end of that process of who to select for the next 5-year period. And I can assure you, it's a very painstaking process that we all take very seriously because you know we actually hold in our hands the ability to help out one family this be represented by all these different applications.”

One of those couples helped by the Darner Trust were Seth and Jenny Van Zante. Along with their four children, the couple lived on the farm from 2008 to 2013.

Seth Van Sante, Fremont, Iowa: “What what we're doing here is not really about us, it's about who's, who's next here. Even though we're right in the midst of trying to become established we've gotta, we gotta think forward to what. Whether it's our kids are or that, that generation and in particular and how. What are things we can be doing today to give them the skills for tomorrow.”

The low cash-rent and high grain prices of the time helped the Van Zante’s get a sizeable head start on the operation they always dreamed of owning.

Jenny Van Zante, Fremont, Iowa, “A lot of people are just getting word out that you can do this with your farm operation you know if there's other Farmers out there and they're not sure what they want to do, they should you know check into maybe setting something up like this for their farm to benefit younger farmers.

This year, the Van Zante’s were able to expand their operation by nearly 700 acres because of the savings opportunity made possible by their stretch on the Darner place.

Brett and Morgan Mowery, the current tenants of the Darner Farm, have off-farm jobs to help make ends meet. They are grateful for what the Trust has provided them in their quest to purchase their own place.

Brett Mowery, Fremont, Iowa: “I farm with my Stepdad part time. Getting started farming is kinda hard so we do a little bit of construction on the side and this came along and we decided to hop on it. Honestly, we probably wouldn't be started farming yet. I don't know there's not really too many people that want to start somebody out any more and cash rent’s King, at the current time and just kind of nice to know that's someone had the vision to start us out.”

 

The Mowery’s are in their fourth year on the farm and are currently searching for land to acquire. Darner’s one idea more than three decades ago will touch twenty couples over the Trust’s lifespan. For those who qualify for the opportunity, it means a greater chance to have a life working the land and the potential to pass something on to their own families.

Seth Van Zante, Fremont, Iowa: “Without the Darner Trust, we probably won't be able to provide opportunities for this for the kids if that's so choose what if that's what they want to do in life is is agriculture. Whether it's in the operations side, whether it's in the retail side, whether there's even in ag whatsoever it's allowed us to give them life experiences that you see in the farming sector hopefully we can extend that to them.”

 

For Market to Market, I’m John Torpy.

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