Starting Your Farm

Steps to buying a farm in Nova Scotia

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  1. Introduction
  2. Keys to Success
  3. Finding a farm
  4. Process

Are You Thinking of Buying a Farm?

Demand is growing here at home, across the country, and around the world for the products of Nova Scotia's rural and agricultural businesses. Many of our local foods are praised for their unique qualities.


Whether you're planning on becoming part of the agribusiness sector—or just farming to produce food for your own family—finding and choosing the right farm is one of the most important steps you can take.

This resource will help you uncover all the details you need to consider before you buy, such as:

  • what you plan to grow or raise
  • what conditions you need for growing
  • how much money you need to make from your farm
  • how much money you need to get started

Farming can be both incredibly rewarding and challenging. The key to success is planning. So let's get started!

Start with a Vision

At some point, you should write down your farm goals, create formal vision and mission statements, and include them in your business plan. But just start with visualizing what you think your life will look like on a farm. This vision will contain elements that will help guide your farm purchase.

For example, do you:

  • value quiet and privacy? A farm at the end of a dirt road might suit you.
  • value community? A property on a busier road with neighbours, especially other farms nearby, might suit better.
  • plan to sell through a U-pick or farm stand? In that case, choosing a farm on a well-trafficked road is essential.

At this stage, just write down a few sentences or bullet points describing your farm, including the business elements of it, and make sure they all fit with each other.



Are You Experienced?

Before you invest a lot of money in a farm, look at your background experience. If you already have experience farming, that will help you know what characteristics you need in a farm.

If you are new to farming, or are transitioning from one type to another, you will benefit greatly from some practical experience or a mentorship.

Working with someone who has mastered skills in the agricultural world will save you from learning the hard way, and possibly spending your money in the wrong place.

How to get experience:



Your Farm Business Plan

Have you ever heard the expression “if you fail to plan, you have planned to fail”? That holds true for every business—including farming.

Writing your farm business plan will help you see if your idea will work. It will spell out the steps you need to take to make it happen, and identify the resources you need, such as equipment.

All lending institutions will require a plan so they can decide whether to give you financing or not.

You will also refer to your plan as your business goes along, so you can ensure you are staying on track and meeting objectives, or in need of making some changes.

Find out more about what your plan needs to include, and resources to help you write yours, in this Business Plans Fact Sheet and by reading this Guide for Beginning Farmers in Nova Scotia.

Workshops You May Find Helpful

Small Farm Expo
Stay tuned for the 2017 date and location!

More upcoming workshops >>

Helpful Guides

PDF Guide for Beginning Farmers


What Do You Need in a Farm?

Not every farm is suitable for every type of farming, or for every farm business. Before you buy a property, think about what you need from it, and consider all the factors. This video will tell you what some others have experienced.


Factors to consider:

Soil Quality

Soil is the basis of farming, so it’s essential that you choose a farm with soil suitable for the crops you wish to grow. Many different factors affect soil formation, and soils can differ from region to region, and even field to field.

This video will give you some information on ways to evaluate your soil, find its history, determine its best uses, and match your goals to the soil’s capabilities.

Factors that affect soil:

  • Soil pH – Soil acidity is measured by pH. Some crops like lower soil pH, others will not thrive. Nova Scotia’s soils are naturally acidic and low in organic matter, but farmland can be highly productive under a good management regime. Find out more about soil pH in this fact sheet.
  • Texture – Soil texture influences a number of properties, including drainage, aeration, susceptibility to erosion, organic matter content, ability to retain nutrients, pH buffering capacity, and more. Find out more in this fact sheet.
  • Physical structure – A well-structured soil is important for maintaining good aeration and water-holding capacity. Find out more in this fact sheet.
  • Organic matter – Organic matter makes up a small proportion of the soil, but has significant impact on its productivity. Find out more in this fact sheet.
  • Crop and field history – Different crops have different nutrient requirements. Some are called “heavy feeders” and deplete soil’s nutrients quite quickly. Others actually put nutrients back in the soil. If you are planning on planting, it helps to know the crop history, as well as other factors such as whether any tile drainage has been installed, and what fields are prone to flooding. The previous owners can be a good resource for this information.


Environmental Factors

Sun, rain, temperature—even the slope of the land—all have an effect on a farm’s production.

Here are some environmental factors to consider when choosing a farm:

  • Sun – The growing season in Nova Scotia ranges from 100 to 200 days, but, like the soil, varies by region. Zones have been identified throughout the province based on their growing degree days (a measure of accumulated heat). Think about what crops you want to grow, and how much sun they need. Different crops require a certain amount of heat to grow and ripen.
  • Frost-free days – The frost-free normal is the average length of time between the last spring frost (0°C at 1.2m height) and the first fall frost. Some crops, such as fruit, are highly sensitive to frost.
  • Shade – Just as crops need sun, livestock needs shade to protect them from heat loading—especially dark-coloured animals that readily absorb heat. Look for trees or other forms of shelter for livestock.
  • Topography – The height and slope of your land—even the location of trees—will affect the temperature, drainage, and your ability to use some equipment. Do not rely solely on a zone map for your information. Visit the land in person so you know what you may be getting into.
    One very important component of topography to consider is the aspect of the land. Aspect refers to the direction of the slope. South-facing slopes receive more concentrated sunlight, which results in a warmer and drier microclimate. Aspect can also have a significant impact on how winds affect a field.


Water

Water is one of the most important factors you’ll need to consider before you buy a farm. You’ll need uncontaminated water for household use, for crop irrigation, and for livestock watering. Check any property you’re considering to find out what types of wells or water sources it has.

You may also need approval from Nova Scotia Environment for your water use based on how much you intend to withdraw, whether you plan to store it, and whether you need to do any construction (such as ditches or culverts). Learn more about environmental law for water and wetlands here.

Types of wells

  • Dug wells – Historically, dug wells were literally dug by shovel until the digger reached the groundwater table. These days they may be dug by a backhoe, but they’re still fairly shallow and have the highest risk of becoming contaminated and having poor water flow. That said, they are a good secondary source for irrigating fields or watering livestock. Just make sure any dug well is inspected often and is constructed to prevent contamination.
  • Driven wells – These are built by driving a small-diameter pipe into soft earth. Although deeper than a dug well, driven wells are still pretty shallow and have some risk of contamination from surface pollutants.
  • Drilled wells – Most modern wells are drilled. These are the deepest of all wells, going anywhere from 31–122m (100–400ft) down. In general, drilled wells provide better water quantity and quality, although there are still exceptions to this.

All wells should be tested frequently to ensure the water is safe and of good quality.

Any wells constructed in Nova Scotia must meet the Well Construction Regulations under the Environment Act. A list of certified well drillers and well diggers in Nova Scotia can be found at: novascotia.ca/nse/cms/Search.asp

How many wells will you need?

Think about all the uses you will need well water for, and how much water you’ll need. Do not plan to use the household well for irrigation unless you know the well’s recharge capacity.

Consider a second well just for farming purposes. You may also want to build an irrigation pond to pre-warm the cold well water and make it more crop friendly. Construction of a pond may require approval from Nova Scotia Environment. Find more information here.

Again, ensure all wells are tested frequently for water quality.

Where are the wells located?

To ensure water safety, ensure all wells are located away from the following:

  • septic tanks
  • livestock yards
  • petroleum tanks
  • manure and fertilizer storage


Streams, rivers, and springs

Naturally occurring water on your property may also be useful for livestock or irrigation. Note that depending on how much you withdraw, you may need approval. Check here for more information. You can find applications for approvals here.

Livestock should not be given free access to any body of water because that could result in environmental damage or contamination of the water. Livestock access needs to be limited. Read this fact sheet for more information.



Drainage

Check the soil on the farm you’re considering to see if it drains well naturally. This video has some tips on how to do that.

Some soils in the province are naturally well drained, while others are not, which severely limits their ability to support crop production. Installing tile drains can help with that, but they can be expensive. You may be able to cost-share this expense, however, with the Department of Agriculture through its farm development programs. Find out more here.

You may also need to consider ditches and/or culverts for flooding prevention. Alterations like this may require approval from Nova Scotia Environment. Find more information and permits here.



Farm Infrastructure

Along with a house to live in, you’ll often need barns, storage facilities, equipment, fencing, irrigation ponds, and other infrastructure on your farm.

If you’re buying an existing farm, much of this may already be in place…but you should still check to see if any repairs are needed or if anything needs to be updated to meet new codes and environmental regulations. Consider all of these costs when making an offer and planning your budget.

Infrastructure to consider:

Livestock housing – Ensure all buildings will suit your livestock’s needs. They should be sited so they are not prone to flooding, excessive wind exposure, or overheating, and built for natural ventilation. They should also meet the Codes of Practice developed by the National Farm Animal Care Council, which includes guidelines on stocking densities and sanitation. Finally, consult the Nova Scotia Department of Agriculture’s Manure Management Guidelines.

Feed storage facilities – Grain-based feed and hay need to be kept in a cool, dry environment. Silage and haylage need to be kept in a moist, airtight environment and can be bagged or plastic-wrapped, which is more cost-effective than constructing a silo.

Livestock fencing – Three types of fencing are used in Nova Scotia to control and protect livestock and pastures: electric, barbed wire, and page wire. Find out how to choose what’s right for your livestock, as well as how to design your fencing system, in these Livestock Fencing Guidelines.

Deer fencing – Deer can be a major nuisance to farm crops. This fact sheet, When White-tailed Deer Become a Problem, by the Department of Natural Resources can give you more information on ways to avoid or limit the damage.

Pasture – Having too many animals on too little land reduces productivity and can damage the land. The Maritime Pasture Manual has information and recommendations for improving both animal and pasture productivity.

Horticultural buildings – These can range from tool sheds to greenhouses to refrigerated storage facilities and can represent a significant investment if they don’t already exist on the farm you are considering. Fortunately, rental facilities are an option and some low-cost greenhouse alternatives have also been developed. For more information, contact a horticulture specialist at Perennia.

Equipment – Make a list of all the equipment you’ll need for your farm (e.g. chainsaw, tractor, carpentry tools, etc.). Keep in mind that larger, expensive items can be rented or cost-shared with other farmers in your area. Buying used is also an option, but be aware that safety standards have changed for some pieces, such as tractors, and older models may not meet these. And don’t forget to add computer to that list!

Forestland resources – Having a forest area on your farm can result in many benefits for your land and you. Forests regulate soil moisture and act as natural windbreaks. You can also use your woodlot as a source of wood for home heating, your forestland to grow Christmas trees, and maybe a maple stand for syrup production. For more information, ideas, and contacts, read this fact sheet.

For more information on farm infrastructure considerations, read this fact sheet.



Location

The same three L’s of residential real estate apply to farms too: location, location, location. Before you buy any farm, take these factors into account:

How close are you to services? These include what you need for the farm, such as farm stores, veterinarians, and places that service equipment, as well as personal services like schools, shops, churches, and community centres.

How close are you to the places where you can sell your product? These include grocery stores or their distribution centres, farmers’ markets, processors, and exporters. Make sure the distance is worth the cost, energy, and time.

Who are your neighbours? You have responsibilities—some legal, some social—toward your neighbours. These include maintaining fence lines, controlling livestock, and just keeping them informed about what you’re doing so you can avoid complaints about noise, dust, and odour. You also have legal protections against trespassers or complaints about normal farming practices.

For more information, check out this fact sheet, and read this FAQ from the Nova Scotia Federation of Agriculture.

How close are you to other farmers? Neighbouring farms often develop mutually beneficial relationships in terms of giving advice, sharing equipment, swapping land, boarding animals, and exchanging labour. These relationships tend to be strongest when farms are located within a few kilometres of each other.

What is the land zoned for? Zoning regulations and land-use bylaws are different for each municipality. You need to carefully check with yours before purchasing land to make sure you can develop the kind of farm you have planned. Regulations and bylaws can affect new construction, processing and retail activities, the keeping of livestock, manure management, and more. Find out more in this fact sheet.

Contact your local Municipal Development Officer before purchasing. You can find a list of contact information here.



Putting a Value on the Property

The value of the property is a combination of what it will cost to buy, what it will cost to get and keep running, and how much income it will generate. Consider all these factors before buying.

This can involve some complicated accounting, so don’t hesitate to ask a Business Development Officer from the Department of Agriculture for help.

There are several ways to determine a farm’s fair market value.

Market comparison – Seek out recent sales of other farm businesses that are similar in size, location, and type of production. This will give you an indication of the current pricing. Keep in mind that no two farms are completely alike, so it may be hard to find an exact comparison.

Asset valuation – In this method, you add up the total value of all the assets (e.g. house, buildings, land, equipment, etc.). This method is not completely objective as the farm’s asset value may not match its business value to you.

In any case, make sure you factor in what it will cost to

  • make the house livable
  • improve the farm’s infrastructure (Does anything need to be repaired, replaced, or upgraded?)
  • make the soil productive
  • get your products to market

Income valuation – This calculates a farm business’s ability to earn enough money to repay debts and provide a reasonable return to the owner, regardless of the individual value of the assets.

The best approach to this method is to use discounted future cash flows.

  1. If the property is currently being farmed and you are buying the business along with the property, start by asking the current owner for full financial statements for at least the past three to five years. Look for trends in profitability, expenses, and productivity. Don’t assume you will match the current owner’s performance in your first year.
  2. Estimate how much money you realistically believe your farm can generate.
  3. Estimate your costs of production, including seed, fertilizer, labour, machinery maintenance, taxes, fuel, insurance, depreciation on buildings and machinery, etc.
  4. Subtract the estimated cost of production from the estimated gross income.
  5. Discount the future cash flow so it represents present value.

This will give you a fairly accurate idea of how much the farm business is worth, not just its assets and real estate, and can help you determine a fair purchase price.

No matter how you value the property, it is recommended that you get help from a financial services and legal professional to ensure the information you are using is valid.



Risk Management

Poor weather, pest outbreaks, and volatile prices—these are some of the risks farm businesses face that are out of a farmer’s control. You still need to develop a risk management plan to help you deal with these worst-case scenarios, however. Spend some time thinking about what you need to do to buffer your business against a variety of bad situations.

AgriInsurance, offered in Nova Scotia through the Nova Scotia Crop and Livestock Insurance Commission, is another option for farmers, which provides production and crop insurance. Premiums are cost shared between you and the federal and provincial governments.



Insurance

There are many insurance options available to cover a farm business’s specific needs, such as livestock, farm produce, equipment and vehicles, liability (if you have visitors or customers on your farm) and product recall insurance (if you sell processed products).

Talk to a broker about what you need and make sure you understand exactly what you are getting. Remember when buying insurance to not make your decision solely on price.

You can also enrol in the Nova Scotia Workers’ Compensation Program, which pays you while you recover from work-related injuries. Under some circumstances, such as if you have foreign seasonal workers, enrolment may be mandatory.

For more information about insurance for farmers and their businesses, read this fact sheet.

Workshops You May Find Helpful

Small Farm Expo
Stay tuned for the 2017 date and location!

More upcoming workshops >>

Helpful Guides

PDF Guide for Beginning Farmers


Finding a Farm

Now that you know what you’re going to farm—and what you’re looking for in a farm—it’s time to actually find a farm.


Search Online

There are websites that specialize in agricultural property.
Realtor.ca (formerly mls.ca) allows you to search for agricultural property by acreage, farm type, price, and location, and then connects you with the realtor representing that property.

Viewpoint.ca is another website that lists properties for sale, as well as a great deal of useful information about properties in the province.

You can find others by doing an online search for farmland for sale in Nova Scotia.



Work with a Realtor

You may find it helpful to work with a real estate agent who understands farming. This person will be aware of important factors such as land quality, water rights, and environmental issues. They’ll also be able to help with the business analysis so you can put a fair market value on the property. Department of Agriculture Business Development Officers can also help with this business analysis.

Again, an online search will help you find the right realtor for you.



More

Many farm properties in Nova Scotia are never formally listed for sale, even though they do often transfer hands. Talk to other farm owners about how they found their farm, and who helped them through the purchase process. Put the word out through friends and colleagues that you are looking. These informal connections could pay off with success, as they did for this couple.

And finally, don’t assume that you have to buy your own farm right away; leasing or renting are also options to help you get started.

For more information, read this fact sheet.

Workshops You May Find Helpful

Small Farm Expo
Stay tuned for the 2017 date and location!

More upcoming workshops >>

Helpful Guides

PDF Guide for Beginning Farmers


The Farm Purchase Process

Buying a farm is similar to buying a residential property, with a few key differences.


New farmers may find it challenging or more expensive to get financing because many lenders consider farming to be high risk. However, there are options and services available just for farmers to help them get started. Do your research and be prepared before you meet with any lender.

Be Prepared

Before you even go for financing, do some preparation in advance. Any lender or institution will ask you for this information, so get it together now.

  • Your farm business plan
  • Your net worth statement (statement of your assets and liabilities)
  • Income tax returns for the past three years
  • Verification of any off-farm income
  • Your credit rating report


Types of Lenders

Some lenders have special services and products just for farmers, such as agricultural mortgages. Others have products designed for specific types of farmers. Shop around to get the right product for you.

For more details, as well as contact information for banks and credit unions, read this fact sheet.



Down Payments

If you’ve purchased a residential home, you know that the down payment can be as low as 5 per cent under some circumstances.

That is not the case with a farm.

Lenders consider farms to be a higher risk than residential property, and many will ask for a larger down payment for that reason. That down payment can be as high as 25 per cent, depending upon your farm business.

Consider working with a specialist mortgage broker who can help you find the right lender for you and navigate the application process.

Most importantly, plan ahead to buy your farm. Build up as much of a savings account as possible to use when the time comes to buy. And remember, there will be a time lag between when you buy the farm and when it actually starts making money: make sure you have cash flow to cover that period.



Getting Approved

Going to lenders ahead of time to get pre-approved for your funding or mortgage is always a good idea. It will save you time in the purchase process, and will give you an idea of how much you can afford to spend.

Don’t give up if you don’t get approved. You have other options, such as:

  • getting a co-signer. This is a person who is willing (and approved) to assume the financial obligation of the mortgage if you aren’t able to make the payment.
  • financing directly from the seller. The current owner may be willing to let you stagger payments and/or purchases over time. Talk to a lawyer and accountant before entering into this arrangement.
  • renting or leasing land. Besides giving you access to land to farm, this method also allows you to write off the leasing costs—something you can’t do with the principal on farm mortgage payments.


Other Costs to Plan For

Budget at least 1.5 per cent of the purchase price to cover other closing costs, such as title insurance, lawyer fees, home inspection, land transfer tax, property tax, etc. You will also need to get insurance to cover your home, property, livestock, etc. (Read this fact sheet to learn more.)



The Purchase Transaction

Once you’re pre-approved for a mortgage, have your down payment set aside, and know what you’re looking for in a farm, it’s time to go shopping and making an offer.

The whole business of making an offer and getting it accepted can be exciting and stressful. If you’ve never gone through the experience before, consider having a real estate agent on your side to review all the paperwork and make sure everything is in order.



What happens now?

The Offer. You’ve found the farm you want, you’ve considered the asking price and have made your own valuation of the farm. Now you put an offer in writing to the owner with the price you are willing to pay.

One of three things will happen: the offer will be accepted, rejected, or countered.

A counter offer (also called a sign back) means the seller is willing to consider your offer, but wants a few things changed. That could be the price you offered, the closing date, what chattels (pieces of property other than the real estate and buildings) that are to be included or excluded. For example, maybe your offer asked that some of the equipment be included; the owner may not want to include them.

Offers and counter offers are all put in writing, and must be responded to within a set time period. In some cases you may have 24 hours to respond. This is why it’s so important to be pre-approved for a mortgage; that way you won’t lose time getting funding approval.

Part of your offer will be the closing date, i.e. the day you want the property to be moved in to your name. The current owner must have vacated the property by this date. Your mortgage will go in to effect on this day, as well.

You should plan to have a home inspection as part of this process; some buyers make it a condition of the offer. Such an inspection may reveal needed repairs or other issues that will give you reason to lower your offer, or ask that the repairs be made by the owner.

When all the details are agreed upon, and your offer is accepted, you will finish the paperwork details with your lawyer and your funder. And the farm is now yours!

Workshops You May Find Helpful

Small Farm Expo
Stay tuned for the 2017 date and location!

More upcoming workshops >>

Helpful Guides

PDF Guide for Beginning Farmers


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