1. What area does Creative Farm and Home Realty serve?
2. What is CRP?
3. What is the "Seven Year Program"?
4. What exactly do you mean by "rural water"?
5. What do you mean when you refer to land as "HEL" or "NHEL"?
6. What is the FSA?
7. What is the NRCS?
8. What is the average farmland price per acre in your area?
9. What types of financing are normally available?
10. What is the climate like in that area?

What area does Creative Farm and Home Realty serve?

Our main office is located in Keosauqua, Iowa and I (Donald Gares) live in Farmington, IA which both are in Van Buren County, Iowa. Although most of our business is presently done in Southeast Iowa I am licensed in Missouri and do occasionally list property in Missouri. The area basically includes, but is not limited to, Van Buren, Davis, Lee, Henry, Jefferson, and Wapello counties in Iowa and Clark, Scotland, Schuyler, Putnam, Adair, Knox and Lewis counties in Missouri. There is certainly nothing "carved in stone" about the above mentioned counties, so if you have rural property to sell outside of these counties, give us a call or e-mail and we can discuss. By the same token, if you are looking for something outside the mentioned counties don't hesitate to ask, we just may know of something for sale in that area or know of someone in that area that can help you.

What is CRP?

Started in the mid 1980's, the "Conservation Reserve Program" (CRP) is the Federal Government's single largest environmental improvement program, and one of the most effective. Today, the CRP is safeguarding millions of acres of American topsoil from erosion, increasing wildlife habitat, and protecting ground and surface water by reducing water runoff and sedimentation. Even more impressive is the fact that this is accomplished through voluntary partnerships between individual landowners and government, instead of compelling participation.

In oversimplified terms, here is basically how the program works:

It is a program that pays individuals who own cropland that is subject to erosion NOT to plant row crops. The land is instead, seeded down in various type of grasses (and sometimes trees) to prevent erosion and increase the wildlife habitat. The restrictions are that you cannot plant row crops (corn, soybeans, etc.), graze the land, or otherwise disturb it. Most CRP contracts are for a duration of 10 years with a fiscal year that runs from October 1st through September 30th. The payment from the government to the landowner is made on an annual basis and paid in October of each year. The contract amount (payment) is based upon so many dollars per acre per year. In this area the normal amount would range from $50.00 to $75.00 per acre per year. When the contract expires, the landowner is free to use the land as he/she desires. Of course, it might be possible to extend the contract. If this is the case one might want to put all of the land back in the CRP program or just a portion of the land. Renewal or extension of a contract is NOT automatic and may or may not be offered by the government when the original contract expires.

What is the "Seven Year Program"?

The "Seven Year Program" is actually slang for "Production Flexibility Contract" and the payments made by the government to the individual are actually called "Market Transition Payments". The plan, by whatever name it goes by, is a United States Department of Agriculture plan which went into effect in 1996. It was, and still is, the government's intention to get out of the farm subsidy business as it existed at that time. To phase out the common farm subsidy as we know it, they enacted the "Seven Year Program" so it would taper off payments until 2002 which would be the last year.

It is the only farm program that I know of that is truly a "No Brainer", you can even get out of it without a penalty. The only requirement necessary for the landowner or operator to receive the annual payment is to be in compliance with his/her "Soil Conservation Plan". Although each farm's Soil Conservation Plan is different, in general you cannot plant crops in a manner or rotation that encourages erosion. For example, you might be required to rotate corn, soybeans and small grain annually or you might be able to "no-till" your soybeans or corn and the crop rotation would not be required. Of course if the land is seeded down to grass or hay you would probably be in compliance.

The annual payment in this area is based upon the corn, oat and wheat base of the farm. Simply put, this means that highly productive land that has been regularly planted to corn, oats or wheat in the past will have a higher payment than land that has not been planted and/or is not as productive.

Three (3) points to remember about the "Seven Year Program".

1. You may leave the program on an annual basis without penalty.
2. If you are not enrolled in the "Seven Year Program", you will probably not need to be in compliance with any Soil Conservation Plan. In future years, as the payments decrease, expect to see more individuals leave the plan so they will have more freedom in what and how to plant.
3. The annual payment is paid to the individual who has the crop "at risk". Thus if a farm is cash rented, the tenant will get 100 percent of the payment. If the farm is rented on a 50/50 basis, both the tenant and the landowner would each receive 50 percent of the payment. If, as the landowner, you farmed the land or hired the farming done, you would receive the full amount of the payment.

What exactly do you mean by "rural water"?

"Rural Water" is really nothing more than city water run to the country via an extensive set of pipelines. Probably the closest comparison would be what REC did with electricity many many years ago. Even though the water table in most locations is conducive to drilling a well, most rural home owners in this area opt for rural water for several reasons. First of course is the consistent quality of the water without the worry of any agriculture chemical runoff. Second would probably be that the water normally does not need conditioned for hardness or minerals. Another great reason to have rural water is the price. Of course, I cannot give you a guaranteed price but I can tell you that personally our rural water bill is only about $25.00 to $30.00 per month. In my book, this is a small price to pay for quality and consistent water.

The above is not meant to indicate that no one still uses a well, because they certainly do. In fact some individuals and families still prefer the taste of well water. Many farms have both rural water and wells with the well used for livestock and other outdoor uses while the rural water is used for human consumption and indoor uses. If the property that you are buying does not presently have a rural water meter on it, there will be a hookup charge (tap fee) involved. Another thing that you should consider is how far away is the closest rural water line that you can hook into. If there is a line running in front of your property, the charge will not be nearly as great as it will be if the closest line is 1/2 mile away. I won't give any price estimates as everyone will vary, but it is something that you should consider when purchasing a rural property.

All in all, rural water is not a necessity but is certainly considered an asset by most home owners.

What do you mean when you refer to land as "HEL" or "NHEL"?

Tillable farmland is divided in two (2) types, Highly Erodible Land (HEL) and Non Highly Erodible Land (NHEL). The determination of type, HEL or NHEL, is made based upon an erodibility index which is much to complicated to be explained here, even if I knew how.

Simply put, flat land is NHEL and hilly land is HEL. As a guideline, and only as a guideline, HEL land is tillable land that has a slope of over 3 to 5 percent. Another general rule is that NHEL land would be a higher grade of farmland and thus more productive and expensive per acre.

Your local NRCS office would assist you in determining what type of land you owner or farmed.

What is the FSA?

Stabilizing farm income, helping farmers conserve land and water resources, providing credit to new or disadvantaged farmers and ranchers, and helping farm operations recover from the effects of disaster are the missions of the U. S. Department of Agriculture's Farm Service Agency (FSA).

The Farm Service Agency was set up when the Department was reorganized in 1994, incorporating programs from several agencies, including the Agricultural Stabilization and Conservation Service, the Federal Crop Insurance Corporation, and the Farmers Home Administration. Though its name has changed over the years, the Agency's relationship with farmers goes back over six (6) decades.

As a rural land owner you could use the FSA for many things. They would provide you with maps of your farm, record your planting and production information, inform you of any available programs that might help you, or possibly even provide the credit for purchasing your farm. There will normally be an office near you, so check them out and see what they have to offer.

What is the NRCS?

The Natural Resources Conservation Service (NRCS), formerly the Soil Conservation Service (SCS) was born of adversity, a national response to the Dust Bowl catastrophe of the mid 1930's. Congress was then convinced that soil erosion was a national menace and that a nationwide partnership of Federal agencies with local communities was needed to help farmers and ranchers conserve their land.

Today, more than six (6) decades later, the soil, water, air, plants and animals still requires someone to speak for its health and well-being. That responsibility remains a challenge for the NRCS.

The NRCS is to the landowner what the "help button" is to we computer users. NRCS employees have the technical expertise and field experience to help land owners solve their natural resource challenges and maintain and improve their economic viability. Nearly three-fourths of the technical assistance provided by the agency goes to helping farmers and ranchers develop conservation systems uniquely suited to their land and individual ways of doing business.

As a land owner you would check with the NRCS to see if your land was HEL or NHEL. They could also assist you in designing your Soil Conservation Plan, provide information, and possibly assistance, about building a pond, determine if your land was eligible for CRP, provide forest and timber information, and many other services. All in all, the NRCS has a wealth of information and knowledge at its disposal and as a land owner you should take advantage of this valuable resource. There will normally be a local NRCS office right in your county.

What is the average farmland price per acre in your area?

Each year the Iowa State University does a Land Value Survey. The survey is intended to provide information on general farmland value trends. Following is the average value per acre of various grades of Iowa farmland in the Southeast district. It should be remembered that the following numbers are averages and should be used only as guidelines and to indicate trends, not to establish the value of a specific farm.

What types of financing are normally available?

First I want to make it clear that "owner financing" is quite uncommon in this area. If any of the listings on Creative Farm and Home Realty's site can be purchased on contract (owner financing) it will be so stated on that listing, otherwise they CANNOT.

Financing is almost always conventional bank financing. There are several banks in the area that are always looking to make "good" loans. Although no two lending institutions operate in exactly the same way, as a general rule they will want a 25 to 30 percent down payment. If you want to contact a local bank on-line, just go to Creative Farm and Home Realty's "link" page and you will find them.

What is the climate like in that area?

The above temperatures, precipitation and snowfall were recorded in the period 1963-1993 at Keokuk, Iowa. Precipitation includes rain, melted snow and other moisture. Temperatures are all stated in degrees Fahrenheit.