New Ranchers Need Tools to Succeed

May 18, 2001

New farmers and ranchers should be provided appropriate financial tools to help them succeed in business, the chairman of the National Cattlemen's Beef Association's (NCBA) Tax & Credit Committee told a Senate Committee. Frank Brost, a cattle producer from Rapid City, SD, told the Senate Agriculture Committee that studies show a lack of startup capital is the primary concern for both lenders and young farmers and ranchers and a lack of equity and the current return on investment keeps many successful partnerships from developing.

NCBA supports efforts to better serve these new entrants to the cattle industry. Relieving the producer and lender from undue regulations are additionally important. "Tools that help young producers begin operating without undue risk to the capital provider must be continued," Brost said. Regardless of the size, location, or type of cattle operation, a number of changes have taken place in recent years that alter the relationship between producers and their credit/capital provider.

"Today's rancher may be depending on as many as a dozen different sources of products, management, and services," said Brost. "These most likely involve a financial relationship." NCBA believes three areas are essential in the next farm bill: investments in the future, reasonable regulations and effective infrastructure, and creative solutions to long-term concerns.

"The repeal of the death (estate) tax, inclusion of farm fish and ranch risk management (FFARRM) accounts, and reductions in capital gains rates will help every producer better manage their resources in a manner that is conducive to business," Brost said.