What Do I Need to Start a Farm?
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Developing a successful agricultural enterprise requires a lot more than just land, seed, and a tractor. This article delineates many of the tangible and intangible components that an aspiring farmer may want to consider before embarking on an adventure that can be exciting and rewarding, but also risky.
A good well or pond, or connection to a municipal water source, is all but essential for any agricultural enterprise. The selected enterprise will dictate the quality and quantity of water needed. If the land does not already have a water source, an accurate estimate of the cost to obtain one will be invaluable. Even if a water source is present, there may be a significant cost for pumps, pipes, hoses, sprinklers, filters, and other equipment.
ACCESS TO CAPITAL
Starting a farm enterprise will require a significant capital investment, and a business plan is indispensable in order to quantify the amount needed. In my personal observations, the primary sources of capital for most farmers are personal savings, income from another source (e.g., an off-farm job), and borrowed money. Farmers should certainly fully investigate cost-share programs and grants, but those sources are likely to cover only a small portion of the total needed, at best.
Even a small operation can require tens of thousands of dollars worth of specialized equipment and tools. The specifics will vary significantly depending on the enterprise, and the aforementioned business plan will help aspiring farmers develop a detailed list with estimated costs.
Infrastructure might include things like gates, fences, sheds, refrigerated storage, electrical service, internet service, and many others. These things are easy to overlook, but require significant investment and are critical for success.
SUFFICIENT CAPITAL TO COVER INITIAL OPERATING EXPENSES
In most cases, it will be months before a new farmer will sell their first harvest. In the case of fruits, berries, nuts, Christmas trees, and others, the first harvest won’t come for years. During that time, it will be necessary to cover operating expenses for items such as seed, fertilizer, fuel, insurance, chemicals, taxes, and many others. Even after that first harvest, new farmers normally face a steep learning curve, and it may require multiple harvest cycles to reach a breakeven point.
FOUNDATIONAL SKILLS AND KNOWLEDGE
It’s been said that an experienced farmer has the skills of a carpenter, plumber, electrician, welder, chemist, and mechanic. It’s also quite helpful to have a basic understanding of soils, pest management, climatology, plant physiology, and other topics. It can take many years to acquire this expertise, whether through workshops, classes, field days, apprenticeships, or hands-on experience (perhaps the best option!).
KNOWLEDGE OF THE SPECIFIC ENTERPRISE
Successful farmers have deep knowledge about the specific enterprise or enterprises on their particular farm. For plant-based enterprises, for example, farmers must learn about recommended cultivars, planting dates and methods, fertility management, pest management, harvest method, postharvest handling, marketing, and more. Even a relatively simple operation involving a single enterprise (e.g., blueberries) requires extensive background information. For North Carolina farmers, N.C. Cooperative Extension is the go-to source for unbiased information on these topics.
Farm enterprises, even on a small scale, require substantial investments of time. New farmers should carefully consider how these demands will fit into existing commitments related to family, off-farm work, recreation, community activities, etc.
STRENGTH AND STAMINA
Farming is physically demanding work, and most small farmers depend on their own labor to get things done. If a new farmer intends to use mostly hired labor, the aforementioned business plan will inform whether the selected enterprise is sufficiently profitable to do so.
REALISTIC INCOME EXPECTATIONS
A comprehensive business plan will allow new farmers to make sound projections about the income potential of a selected enterprise. Farmers can then decide whether those projected amounts meet their expectations, prior to spending money on seed, equipment, fertilizer, etc.
ADEQUATE RISK TOLERANCE
In any undertaking, there is a risk of failure, and farming includes risks that other entrepreneurs may not face (e.g., drought, pests, unusual weather). New farmers are advised to carefully consider whether a failed enterprise would be tolerable, or if it would be excessively detrimental to their personal or family financial position. Aspiring farmers with a low-risk tolerance may want to consider investing their time, labor, and money elsewhere.
It may be surprising that this item is not at the top of the list, but of all the items listed here it may be one of the easiest to obtain. Also, consider that all land is not created equal. Generally speaking, an agricultural enterprise requires cleared land with suitable soil. The suitability of a given soil is determined by such factors as slope, tillable depth, drainage characteristics, fertility, etc. The amount needed varies greatly depending on the selected enterprise. While there are various exceptions, three to five acres is a good starting point for many small farm enterprises.
People choose to start farming for a variety of reasons, and profitability is not always the primary goal. However, thorough planning that takes into account the parameters listed here should help aspiring farmers improve the odds.