Do you enjoy early mornings and the rewarding feeling of a long day of hard work? Or maybe you take pleasure in taking care of animals and you have some serious gardening skills. If any of those qualities describe you, you may be in the market to run a farm.
Maine is a great state to open a farm because of its affordability and wide open spaces. Before you embark on this exciting endeavor, here’s everything you need to know about buying farmland in Maine.
After you’ve decided what farm industry you’re doing business in, you’ll want to find a property that suits those needs. There are a few ways you can go about finding farmland. Your first option is to look for pre-existing farmland that fits the industry you’re going to work in. This will save you on a decent amount of startup costs such as proper machinery, supplies, fenced-in land, and a house to live in.
Many potential farmers don’t realize that you not only need to find adequate land, but you need to find a house that sits on that land as well. It’s also important to find a property that either already has utilities hooked up, or has the option to have them hooked up.
A property that doesn’t have any of the existing supplies will need a suitable house to live in, a barn to hold working tools, a fence to block off your land, proper living conditions if you’re raising animals, and adequate farming machinery if you’re growing food. As you can see, these costs can add up fairly quickly and might not be the ideal route for someone who is going into this with little money saved.
Farmland prices in Maine are fairly low given the amount of acreage many of them have. For example, you can get a four-bedroom farmhouse and 150 acres of land for just under $500,000 in Aroostook County.
Despite farmland in Maine being fairly inexpensive, other aspects of starting a farm are more costly. If you’re looking to get an education in farming to expand your knowledge, a degree in agriculture costs an average of $70,000. For the other required equipment such as a grain truck, planter, grain drill, ATV, trailers, and more, you’re looking to spend around $420,000. If you were to buy existing land, you might be able to talk to the previous owner about purchasing their equipment from them.
As a new farmer, there are many resources available to you in order to help fund your new career.
Maine Farmland Trust
For farmers specifically in Maine, you have the option to reach out to Maine Farmland Trust, which is an organization that protects farmland, supports farmers, and advances the future of farming. They provide beginning farmer services that help beginning farmers create and sustain their new business.
USDA Farm Services Agency
In terms of financing, you also have the option to utilize the United States Department of Agriculture farm loan programs. These farm loan programs seek to provide opportunities to family-size farmers and ranchers to start, improve, expand, transition, market, and strengthen family farming and ranching operations.
They also provide assistance to beginning farmers, racial and ethnic minority farmers, and women producers. If you are a farmer who plans to use alternative farming methods such as hydroponics, aeroponics, vertical farming, and freight container farming, they have programs for you, too.
The USDA’s Beginning Farmers and Ranchers Loans can provide you access to land and capital. They also have operating loans that can assist beginning farmers in becoming prosperous and competitive by helping to pay normal operating or family living expenses. This program opens doors to new markets and marketing opportunities as well as assist with diversifying operations.
Taxes and Fees
Farmers are subject to paying various taxes to both the state and the federal government. Generally speaking, farm operators pay little or no tax for off-road gasoline and diesel fuel but are required to pay these taxes on fuel used by on-road vehicles.
As a farmer, you can also expect to pay property taxes, sales taxes, and payroll taxes. Sales taxes are imposed on farmers who regularly sell goods that are subject to sales tax. These taxes will only be except under certain circumstances such as equipment, seeds, feed, fertilizer, lubricants, animal bedding, and livestock drugs.
There are also many tax benefits for people in the farming business. You can deduct ordinary and necessary farm expenses. If you opened a loan to start your business, you can deduct the interest you pay on the loan. Bad weather such as a drought or flood may force you to sell more livestock than you normally would in a year. If so, you may be able to delay reporting a gain from the sale of the extra animals.
The economic outlook on the farming industry is good. Farming income peaked in 2013 at $134 billion and is now at a slight decrease of 28%. However, in the next 10 years, these numbers are expected to rise slightly and stay just below $80 billion. These numbers are due to the fact that after the peak in 2013, rules and regulations changed and farmers started tapping into their equity.
Overall, getting into the farming industry doesn’t have to be tough if you do your research and come prepared. If you are considering purchasing an established farm, we always recommend you work with an experienced, local real estate agent for assistance and support throughout the process.