Nebraska College of Technical Agriculture Teaches Rural Entrepreneurship

The University of Nebraska’s Nebraska College of Technical Agriculture  - Curtis (NCTA) wants young people to make their living in rural Nebraska and offers unique programs to help them succeed.

“We teach entrepreneurship across our entire curriculum,” said Weldon Sleight, Ph.D., dean of NCTA.

Entrepreneurial skills can help rural residents to establish and maintain both agricultural and non-agricultural businesses in a time when Nebraska’s rural population is declining in many counties, Sleight said.

“Many times our children leave farms and ranches to go away to college and never find their way back,” Sleight said. “And that’s an unfortunate situation. Many times students who go away to college have never been shown what opportunities are at home.”

Of Nebraska’s 93 counties, 75 have lost population over the last eight years, he said, and some of these counties’ populations have been decreasing for decades.

“Rural Nebraska is dying, and we absolutely need these young people to go home to these rural communities and establish families,” Sleight said.

Nebraskan farmers’ average age has increased from 48.5 years old in 1982 to 58 today. NCTA’s programs aim to lower the average age of the farm, ranch and “Main Street” business owners in the state.

“It takes young people to go home, to have children, to keep the schools open, to keep Main Street open,” Sleight said.

The solution, he said, is ownership.

“If they own something, they’ll stay,” he said. “But if they are just hired hands, when a better job comes along they will leave,” Sleight said.

In this post, Nebraska Entrepreneur looks at two of the programs NCTA offers to promote agricultural operation ownership: the 100 Beef Cow Ownership Advantage Program and the 100 Acre Advantage Program.
Both are designed to help a young person get business experience running an agricultural operation and obtain the collateral needed to purchase a ranch or farm.

Traditionally, a young person interested in ranching or farming might work as a ranch or farm hand, hoping that in 10 to 20 years an opportunity to buy agricultural property might arise.

But if property is for sale and the person needs a large loan, the bank will ask for collateral and business experience. A person with only farm- or ranch-hand experience likely won’t have enough of either.

NCTA’s Advantage programs help students get the collateral and proven experience they need to qualify for a loan.

In the 100 Beef Cow Ownership Advantage, an NCTA student locates a rancher nearing retirement willing to participate in the program. The student creates a partnership agreement with the rancher, writes a business plan and buys 100 cows from the rancher with a low-interest loan from the U.S. Department of Agriculture (USDA) Farm Service Administration (FSA).

After graduation, the young person works full-time for the rancher, caring for the rancher’s herd and the purchased 100 cows that remain part of that larger herd.

“We think they will be much better employees because they’ll be owners,” Sleight said. “Their cows will be part of the herd, but they will be able to see that they are building something for the future,” he said.

Sleight said in 10 to 15 years after graduation, the young person could own 300 cows, either through purchasing additional cows or saving heifers.

Three hundred cows would have significant collateral value. In addition, since the FSA loan requires a business plan and cash flow statements every year, the young person would have proven experience in the business of managing the ranch or farm.

In this scenario, when ranch property comes up for sale, the young person will have the collateral and experience the bank requires for a loan.

Similarly, the 100 Acre Farm Advantage Program aims to help young farmers establish themselves in the business of farming. The NCTA student creates a business plan and partnership agreement that includes working for an existing farmer for three years after graduation. The student applies for a low-interest FSA loan to purchase seed, fertilizer and equipment to farm a portion of the land.

After three years, that person is eligible for a low-interest FSA loan for real estate of up to $250,000 that requires a 5 percent down payment. Sleight said NCTA hopes the person can save about $25,000 for the down payment during the three years working for the established farmer. The young farmer can then borrow an additional $250,000 bank loan guaranteed at 90 percent by FSA to offer little risk to the bank.

“This means a student could borrow half a million dollars, or $475,000 plus his or her $25,000, to buy that farm. This could happen three years after they graduated from college,” Sleight said.

Today 43 students participate in the Advantage programs, Sleight said, and 15 traditional and adult students in the 100 Beef Cow Ownership Advantage Outreach program have received loans.

Partners for the Advantage programs include the FSA, the Nebraska Department of Agriculture (NDA), as well as farm and ranch organizations.

“The thing we want to do … is not just send them home to be a hired hands,” Sleight said. “We want them to go home as a partner.”

In another post, Nebraska Entrepreneur will report on the Outreach program for adult students and the Business Builder program, designed to foster ownership among young people in rural Nebraska’s “Main Street” businesses.