Purchasing farmland carries with it a number of risks and uncertainties. This makes it essential to thoroughly research the property and everything associated with it including all federal, state, and local rules and regulations.
Contact a Real Estate Agent
Contact a real estate agent who is familiar with farmland and rural properties. Many real estate agents are only knowledgeable about city and urban property. Finding a real estate agent who is knowledgeable about all the aspects of farming, including soil, water, legal rules and regulations ensures that the process will go much more smoothly. Rural real estate is a complicated issue
Onsite Evaluation
Visit the farm a couple of times with an escrow to evaluate the site for farming. Water resources and the quality and condition are the two most important aspects of farmland.
Investigate the water resources on the property. It is also important to understand water rights issues and irrigation issues. Talk to the water master of the county. Read the water certificate and pay attention to the terms of usage of water for irrigation.
Verify that the water rights for the land are still valid and active. Find out if there is an irrigation association that manages irrigation rights. Clarify what the regulations concerning ponds, creeks, and wells are concerning irrigation
The primary issues to consider in terms of the land include slopes, sunlight exposure, the condition of the topsoil, drainage, the quality of the land, and other issues such as flooding. The primary purpose of the farmland will determine the best answer to some of these questions.
The NRCS soil survey is available online and user friendly. Type in the farm’s site address and you get an aerial map of the property – you can review info about classification, type, drainage class, and yield data for crops and livestock
The Infrastructure
The condition of the infrastructure of the farm is also an important consideration. Are there outbuildings on the property? Is the fencing is good shape or does it need to be replaced? Similar questions should be asked about farm equipment, irrigation pumps and so forth.
Federal, State, and Local Government
In order to operate a farm it is essential to know about legal, regulatory, and tax rules and regulations.
- You need to establish your farm business entity. This requires filing the necessary forms and paperwork. This information can be found at the local town clerk and tax assessor’s office.
- You must comply with all federal, state, and local taxes for a farm business. State laws that affect farming vary from state to state. Contact the State Department of Agriculture or Farm Bureau to find out the legal requirements for your state.
- The local municipality may require all farming businesses to register.
- Research all other local zoning and health laws and regulations that impact farming businesses.
- There are specific federal, state, and local laws the regulate and monitor farm products such as livestock and poultry, cooking and packaging, and produce handling.
Two useful resources about federal and state laws and regulations are:
- The Legal Guide to Farm Direct Marketing
- The National Center for Agricultural Research and Information
Other Considerations
Two other important considerations the potential farm owner should consider are (1) the proximity to markets and (2) the neighbors. Neighbors play an important role in the quality of life in farming and rural settings. Introduce yourself to the neighbors and let them know that you are thinking about buying the farm.
The neighbors can fill in helpful details and knowledge about the farm. Meeting the neighbors also provides an opportunity to feel each other out. Access to local farmer’s markets is an important consideration for a small, family owned farm. If the nearest farmer’s market is 50 miles away, that may be a problem.
About the Author: James Mathews is a freelance writer who covers agriculture and farming topics, as well as the careers that fall within these two category. He’s currently working on a piece to cover researching used construction equipment online and the easiest way to go about walking through the buying process.
