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Upcoming Opportunities for Minnesota’s Beginning Farmers

2018 is bringing new opportunities for beginning farmers in Minnesota. Two new programs are geared toward assisting beginning farmers and farm asset owners who want to help them. These programs are the Beginning Farmer Incentive Credit for existing farm asset owners who rent or sell assets to beginning farmers, and the Beginning Farmer Management Credit for beginning farmers enrolled in an approved farm business management course. The programs were created by the Minnesota Legislature during the 2017 Special Session to reduce an individual farmer or asset owner’s Minnesota income tax. The current legislation funds these tax credits through 2023, according to the Minnesota Department of Agriculture (MDA).
The Beginning Farmer Incentive Credit is a tax credit for owners of agricultural assets. These assets may be land, livestock, facilities, or machinery located in Minnesota. The assets must be sold or leased to a beginning farmer who is not a family member of the asset owner. An asset owner may be an individual, trust, or a qualified pass-through entity. Seven requirements for beginning farmer eligibility are outlined by MDA.
According to the MDA, a beginning farmer is defined as:
-A Minnesota resident who is seeking entry, or has entered into farming within the last 10 years
-A farmer who will provide the majority of the labor and management of the farm that is located in Minnesota
-A person who has adequate experience and knowledge of the type of farming for which they seek assistance from the Rural Finance Authority
- A person who can provide positive projected earnings statements
-A person not directly related to the owner of the agricultural asset. (This includes parents, grandparents, brothers, sisters, spouses, children, and grandchildren). Legal adoption shall be considered in full effect. 
-A person whose net worth does not exceed the limit provided under section 41B.03, subdivision 3, paragraph (a), clause (2). This limit is currently $800,000.

Additionally, the beginning farmer must participate in an approved financial management program. Costs of financial management programs up to a maximum of $1,500 per year (up to 3 years) may also be eligible for a tax credit.

The Beginning Farmer Management Credit is equal to 100% of the cost (up to $1,500 per year) of participating in a financial management program approved by the Minnesota Rural Finance Authority (RFA). This credit directly reduces Minnesota income tax due for a beginning farmer.

RFA will administer the tax credits by: 1) certifying beginning farmers, 2) assisting beginning farmers with locating eligible financial management program options in their area, and 3) certifying owners of agricultural assets are eligible for the tax credit. Applications and instructions on becoming a certified participant will be posted on RFA’s website. This is a first come, first served initiative.

These two new efforts to assist beginning farmers will complement existing programs including the Beginning Farmer Aggie Bond Loan Program and the Beginning Farmer Loan Program which are targeted at helping beginning farmers succeed. This information is available at


Don Nitchie
Extension Educator, Agricultural Busines Management
(507) 752-5081
Jason Ertl
Extension Educator, Ag Production Systems
(507) 237-4100
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