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Tuskegee University is an independent and state-related institution of higher education.  Its programs serve a student body that is coeducational as well as racially, ethnically and religiously diverse.


The New Beginning Farmer /Rancher IDA Program

By: N. Baharanyi, R. Zabawa, A. Paris, and J. Quaye-Wilson, Tuskegee University

     The federally established Individual Development Account (IDA) program has proven to be an outstanding savings incentive model for low-income individuals and families. IDAs are matched savings accounts that reward the efforts of working poor families who are trying to acquire long-term productive assets such as a home, small business, and post secondary education. The reward or incentive is provided through the use of matching funds from private and/or public donors. Nationwide, IDAs have grown from three programs in 1995 to more than 500 in 2005, and anywhere between 20,000 and 50,000 low-income households have opened accounts (CFED 2005).

     The new Farm Bill authorizes a New Beginning Farmer/Rancher IDA pilot program demonstration to be established for at least five years in 15 states. The pilot programs would be funded by the U.S.D.A. in coordination with the farm loan programs of the Farm Service Agency. The bill authorizes $10 million annually through 2012 for matching funds and financial education.  The competitive grant program would be operated by nonprofits, tribes, and local government.  The maximum grant size to organizations would be $250,000 and requires a 50% local match. Program functions, including account management and financial education could be supported by 10% of the federal grant award and the local match. When considering applications for the program, preference shall be given to qualified entities that have a track record of serving eligible participants and expertise in dealing with financial management aspects of farming.

     The eligible participant must be a beginning farmer or rancher who lacks significant financial resources or assets. Annual income of the participant must less than 80% of the area median income or 200% of the most recent federal poverty income guideline. The eligible participant must enter into a contract that requires a monthly deposit into a personal savings, an agreement on the eligible expenditure for which the savings will be used when the contract is completed, and would receive a 2:1 match for up to $6,000 in matching funds for each fiscal year of the contract.

Funds may be used for one or more of the following:

  1. Farm land purchase or down-payment for land purchase
  2. To make mortgage payments for up to 180 days after purchase of farm land
  3. Purchase farm equipment or production, storage, or marketing infrastructure or buy into an existing value-added business
  4. Purchase breeding stock or fruit or nut trees or trees to harvest for timber
  5. To pay for training or mentorship expenses to facilitate specific entrepreneurial agricultural activities.

     Taken together, this new farmer/rancher IDA pilot program would offer beginning farmers and ranchers an opportunity to accumulate and utilize financial resources and to build long-term productive assets.


CFED (Corporation for Enterprise Development). 2005. "What We Want -The CFED Policy Agenda." CFED. Washington D.C.  http://www.cfed.org [Retrieved March 2, 2007].

  U.S. Senate Committee on Agriculture, Nutrition, and Forestry. Food and Energy Security Act of 2007.  www.agriculture.senate.gov [Retrieved June 30, 2008].