MARBIDCO Land Preservation and Next Gen Programs
Next Generation Farmland Acquisition Program
Next Generation Farmland Acquisition Program ("Next Gen Program")
The Next Generation Farmland Acquisition Program is available to help qualified young or beginning farmers who have trouble entering the agricultural profession, because of relatively high farmland costs and lack of access to adequate financial capital to purchase farmland.
The Next Gen Program addresses two key challenges: 1) Helping young or beginning farmers obtain financing for the purchase of farmland; and
2) Helping to secure a viable future for Maryland's agricultural industry by preserving working farm and forest land for future generations.
MARBIDCO has $2.5 million available to distribute to select “Next Gen Farmers” during the upcoming fiscal year (at the time their new farms are being purchased). The selection for participation in this program is on a competitive basis.
The Next Gen Program
The Next Gen Program is essentially a fast-moving farmland conservation easement option purchase program that is designed to help facilitate the transfer of farmland to a new generation of farmers, while also effectively helping to preserve the subject agricultural land from future development.
Under the Next Gen Program, MARBIDCO will pay up to 51% of the Fair Market Value (FMV) of the land only (with a cap of $500,000). Following the land sale transaction, the Next Gen Farmer will then have a period of several years to sell the permanent easement to a rural land preservation program that is able and willing to hold the permanent easement (thus extinguishing the development rights on the property forever). Once a permanent easement has been subsequently facilitated, the Next Gen Farmer is obligated to repay MARBIDCO the original Next Gen Program Option Purchase amount, plus a 3% administrative fee. If the Next Gen Farmer cannot sell the permanent easement within the specified timeframe, the Option will be exercised (for no additional money) and the permanent easement will be held by a “third-party default easement holder” (either a county agricultural land program or a private land trust designated by MARBIDCO).
While there is no age restriction to participate in the program, persons who are “beginner farmers” will have a greater likelihood of being selected to participate. A “beginner farmer” is defined as not owning a farm or ranch (or owning less than 10 acres), not operating a farm or ranch as a principal operator for more than 10 years, having at least one year of farming experience, and expecting to substantially participate in the farming operation on the subject property.
People interested in applying to the Next Gen Program are requested to make contact with their county farmland preservation program office (in the county in which the farmland is located) by no later than a month before submission, to discuss the suitability of a subject farm being permanently preserved. Moreover, certain required paperwork prepared by farm property sellers must be received in the county office by no later than a month in advance.
The Next Gen Program application deadline (including submission of all required forms and related attachments) is now on a monthly basis, with applications due on the last business day of each onth by no later than 4:00 p.m., at the MARBIDCO office in Annapolis. Late applications will not be accepted.
Download Application
In addition, it is advisable that all prospective Next Gen applicants should have the following items in process:
- A contract of sale for the subject farm property is negotiated and ratified (by the applicaiton deadline).
- Note: It is recommended that these purchase contracts not expire before the end of March 2023, and that there be a provision for the return of an earnest money down-payment to the farmer in the event that the Next Gen Program funding is not approved. It is also suggested that these contracts specify whether the buyer and/or seller will be responsible for paying the costs of a potential property survey, as well as other closing costs.
- Be in contact with their respective county agricultural land preservation administrator or designee to discuss the subject farm property (as this individual will play an important role in the application process).
- Have a detailed farm business plan developed.
A Next Gen Farmer will also need to seek the participation of a commercial bank or Farm Credit Association to provide a portion of the farm purchasing financing, but a firm bank loan commitment is not required until a Next Gen Farmer has been approved for Next Gen funding.
The Next Gen Farmer will have a short window of time after being notified of approval to arrange for commercial lender financing and submit a loan commitment letter to MARBIDCO. Therefore, MARBIDCO strongly encourages prospective Next Gen applicants to contact a commercial lender during the application process to get a clear sense of the lender’s financing requirements.
Further information about the Next Gen Program may be obtained by contacting Allison Roe, Financial Programs Officer, by telephone at: (410) 267-6807, or by email at: aroe@marbidco.org.
For business planning resources, download this University of Maryland Extension and Agriculture Law Education Initiative flyer. Additional resources can be found on the resources webpage. Also, read some Next Gen Program success stories here.