Uncle Sam Now Charges 5.6% to Run Your Farm for a Year. How to Add a New Income Stream Without Borrowing a Fortune to Do It
In late 2000, Dick Swank of Hollister, California, got the kind of news that keeps a farmer up at night.
His local bank had been sold. In the words of Bonnie Swank, who later married Dick and wrote their USDA success story, "the new owners called in all the agricultural loans."
So how do you add a new income stream when money is this expensive? You start with what your farm already owns. You test it cheaply. You prove it with real sales. And you borrow only when a written plan shows the loan gets paid back with room to spare.
The Swanks didn't follow a textbook, but their story shows that same order. Here is how it played out.
Earlier that year, Dick had planted an eight-acre field of Indian corn just for a maze. He didn't build a fancy ticket office. He moved his old cherry shack in and used it as the ticket booth.
The weather that first season was terrible. They still "made a little money."
Then the USDA Farm Service Agency stepped in. Bonnie wrote that they "were granted a seven year loan that would pay off the bank."
A year or two later, they moved the maze to a new spot set back from the road, and attendance doubled.
At the end of 2005, as they "put our sixth maze to bed," the Swanks walked into their USDA office with two checks. "One check paid off our operations loan for the year." The other paid off their long-term loan, two years early.
To be fair to the facts: the Swanks also delivered produce and ran farmers' market stalls. Bonnie's story doesn't say the maze alone made that money. But it does show the order of events. They started with a field and a shed they already had. They grew it slowly. And when they had to borrow from FSA to replace the bank debt that was called in, they paid it off ahead of schedule.
That order matters more today than it has in years. Because on November 1, 2026, FSA's direct operating loan rate went up again.
Quick note: this is general information from Stephen Loke of AgritourismSuccess.com, not financial, legal or tax advice. Talk to your lender, accountant and attorney before you borrow.
The short answer FSA's direct farm operating loan rate is now 5.625%, and its direct farm ownership rate is 6.25% (effective Nov. 1, 2026). Commercial bank farm operating loans averaged about 7.12% in mid-2026 in the Chicago Fed's survey. At those prices, every new venture has to pay back fast. Visitor income built on what you already own (a barn, a spare room, a field, an orchard, a view) can start for a few thousand dollars instead of a few hundred thousand. Test it small, prove it, then borrow only if the numbers say so. |
The News: FSA Loan Rates for November 2026
Here is what USDA announced on November 2, 2026, for rates that took effect on November 1.
FSA loan type | Rate (Nov. 1, 2026) |
|---|---|
Farm Operating Loans (Direct) | 5.625% |
Farm Ownership Loans (Direct) | 6.250% |
Farm Ownership (Direct, Joint Financing) | 4.250% |
Farm Ownership (Down Payment) | 2.250% |
Emergency Loan (Amount of Actual Loss) | 3.750% |
Commodity Loans (less than one year) | 5.500% |
Farm Storage Facility Loans | 4.875% (3-yr) to 5.250% (12-yr) |
Sugar Storage Facility Loans (15 years) | 5.500% |
Guaranteed loans | Set by your commercial lender |
FSA's operating and ownership microloans carry the same rates as the direct loans, 5.625% and 6.25%, with one important exception on operating microloans for beginning and veteran farmers that I'll cover below.
Now look at where these numbers came from.
In February 2021, the direct operating rate was 1.375%. Today it is 5.625%. That is about four times higher.
Even this year, the trend has been up. The rate sat at 4.625% in January 2026. It has climbed a full percentage point since then. The ownership rate, 2.625% in early 2021, now sits at 6.25%.
Here is what that means on a $100,000 balance. At 1.375%, first-year interest is about $1,375. At 5.625%, it is about $5,625.
Same farm. Same loan. Four times the interest bill.
FSA Is Still Cheaper Than the Bank (If You Can Get It)
Here's the part most news stories leave out.
According to the Federal Reserve Bank of Chicago, the average farm operating loan from commercial banks in its district was 7.12% at the end of the second quarter of 2026. Farm real estate loans averaged 6.79%.
So FSA direct money is about 1.5 points cheaper. But it comes with limits, eligibility rules and paperwork. AgProud reported other Fed surveys putting operating loans at 7.39% (Kansas City Fed, variable) and 7.78% (Dallas Fed, fixed).
And the stress is showing. The same Chicago Fed survey found 3.7% of farm loans had "major" or "severe" repayment problems, up from 2.9% a year earlier and the highest since 2020. USDA's Economic Research Service forecasts total US farm debt will climb 4.6% to $605.1 billion in 2026. (I broke that number down in US farm debt just hit a record $605 billion.)
Citing USDA estimates, the American Farm Bureau Federation reported the average farm spent about $6,809 on interest in 2024, up 46% from $4,672.
That is the backdrop. Now let's put the new rate into plain dollars.
What 5.625% Really Costs You
Percentages hide pain. Dollars don't.
The table below shows an illustrative fixed-rate loan at today's 5.625% direct operating rate, paid monthly over 7 years (the longest term for FSA direct operating loans). I used the standard loan payment formula: Payment = Loan × r ÷ (1 − (1 + r)^−84), where r = 5.625% ÷ 12.
Loan amount | Monthly payment | Yearly payments | Total interest over 7 years |
|---|---|---|---|
$25,000 | $361 | $4,329 | $5,302 |
$50,000 | $721 | $8,658 | $10,604 |
$100,000 | $1,443 | $17,315 | $21,207 |
$400,000 | $5,772 | $69,261 | $84,829 |
Illustrative example only. Your lender may set annual or seasonal payments, fees and a different rate, which change these figures.
Look at that last row. A $400,000 loan, the maximum for an FSA direct operating loan, costs about $85,000 in interest alone. And that is at the cheaper government rate.
Now compare the past. The same $100,000 over 7 years would have cost about $4,947 in total interest at February 2021's 1.375%. Today it costs $21,207. At the 7.12% bank average, about $27,272.
That's a difference of more than $16,000, on the same loan, purely because of timing.
The "Grow Bigger" Trap
When farm income gets tight, the old advice is to get bigger. More acres. Bigger equipment.
Let's price that.
USDA NASS puts average US cropland at $6,020 an acre in 2026, which Farm Policy News noted is the first time it has topped $6,000. In Iowa it's $10,700. In Illinois, $10,200.
Illustrative example: 40 acres at $6,020 = $240,800. Financed at the 6.25% FSA direct ownership rate over 40 years, the monthly payment is about $1,367. Total interest over the life of the loan comes to roughly $415,416.
Add it up and you would pay about $656,216 for $240,800 of land. That's roughly 2.7 times the price.
Machinery is no softer. The University of Illinois farmdoc 2025 cost tables give a list price of $333,793 for a 175-horsepower (PTO) tractor.
Now look at the other side.
A Rutgers extension budgeting module walks through a farm-tour example with just $4,000 in fixed costs: insurance $1,000, parking improvements $1,000, farm market improvements $1,500 and a child play area $500. At $100 a tour with $50 in variable costs per tour, the farm breaks even after 80 tours.
The maths: $4,000 ÷ ($100 − $50) = 80 tours.
A Rutgers corn maze budget for a hypothetical 5-acre maze (2013 dollars) totals about $25,825 for the season. At $7.50 a ticket, that breaks even at roughly 3,444 visitors ($25,825 ÷ $7.50).
I'm not saying a tour is the same business as a tractor. I'm saying one risks a few thousand dollars and the other risks your farm. (See how much it really costs to start an agritourism business for costs by activity.)
The "Pay Back Fast" Test Every Lender Runs
When money costs 5.6% or 7%, a lender asks one question above all others: how does this loan get repaid?
They answer it with a number called the coverage ratio, or debt service coverage ratio (DSCR).
DSCR = cash available to pay debts ÷ the debt payments due that year
A farmdoc daily article from the University of Illinois says it "would not be uncommon" for a lender to require a minimum of 1.15 or 1.20, and that 1.50 or higher is "considered good." University of Wisconsin-Madison Extension's farm finance scorecard calls anything below 1.25 "a concern and a weakness," and above 1.75 strong.
In plain words: many ag lenders want to see at least $1.15 to $1.25 in spare cash for every $1 of loan payments.
A Worked Example (Illustrative)
Say you borrow $50,000 at 5.625% over 7 years. Your payments are about $8,658 a year.
Now picture three seasons:
Weak season: $8,000 left after running costs, family living and taxes. $8,000 ÷ $8,658 = 0.92. You're short. The loan payment eats into savings.
OK season: $10,500 left. $10,500 ÷ $8,658 = 1.21. Inside the range many lenders require. Tight.
Good season: $13,000 left. $13,000 ÷ $8,658 = 1.50. Considered good.
Here's the lesson. The smaller the loan, the easier it is to pass this test in a bad year. If you start a visitor business with $4,000 of your own money instead of $50,000 of the bank's, there's no payment to cover at all.
That's not a trick. That's the asset-light approach.
The Asset-Light Playbook: Start With What You Already Own
Walk your farm with a notebook this week. Don't look at it as a farmer. Look at it as a guest from the city.
Write down every one of these you have:
A barn, shed, garage or old outbuilding
A spare bedroom, empty farmhouse or cottage
A field you could rest for a season
An orchard, pumpkin patch, berry rows or flowers
Animals people love to see
A creek, a hill, a view, a sunset
A yard with space to park 20 cars
Every item on that list is an asset you already have. Here's what real farms did with theirs.
Liberty Hill Farm, Vermont: The Farmhouse Bedrooms
Beth and Bob Kennett's family runs a working dairy in Rochester, Vermont. In the early 1980s, dairy times were hard and the family needed income. Nearby ski areas were short on beds.
So in the winter of 1984, they took in paying guests in their roughly 200-year-old farmhouse. No new building. The first guests were a New Jersey family who came to ski.
Seven Days reported 7 guest bedrooms, family-style meals for up to 15 guests, and farm tours that include milking and bottle-feeding calves. Beth estimates they have "easily hosted 40,000 people" over four decades.
Her secret? "It's really not about the bed, and it's not about the pancakes."
Hull-O Farms, New York: The Spare Cottage
Frank and Sherry Hull's family has farmed 275 acres in the northern Catskills since 1786. When milk prices fell in the early 1990s, the dairy struggled.
They had a spare two-bedroom cottage. They turned it into a farm stay. A friend placed the first ad.
Sherry put it bluntly to Scenic Hudson: "We would've had to give up the farm" without it. Their Farm Stay USA listing today shows an average of $350 a night for the two-bedroom Rose Cottage.
Leaping Lamb Farm, Oregon: The Cottage Nobody Moved Into
Scottie and Greg Jones bought a 70-acre farm in Oregon's Siuslaw National Forest in 2003. Lamb, hay and even gate-latch sales didn't cover tractor breakdowns and inputs. Scottie admitted "our farm was going in the tank."
They had built a cottage for their daughter, who never moved in. With a conditional-use permit, they opened it as a farm stay in 2006. DTN reported rates of $175 to $400 a night, with a two-night minimum.
In January 2018, DTN reported that hospitality made up 90% of their income.
Stitchpool Camping, England: An Empty Field and Rented Kit
This one has the clearest cost breakdown I've found.
John and Vikkie Huxtable farm sheep and cattle near Exmoor in Devon. In 2020, they opened a 2.5-hectare field as a pop-up campsite: 30 pitches for 28 days.
They built nothing. Everything was hired:
12 portable toilets at £45 a week each, emptying included
8 showers at £80 a week each, with gas heaters for hot water
A skip for £150, plus £150 per tonne of waste
15% commission to the booking website
Farmers Weekly reported about £12,000 of extra income in four weeks, and about £9,500 profit after costs and commission. (They ran under England's pop-up camping rules at the time. UK readers: check today's rules with your local planning office.)
Ranch Retreat and Medicine Creek Farm, Minnesota: Pasture, a Barn, a Camper
Jolene Danca opened her 40 acres to campers in 2018. She has three campsites, two with electric, and also rents out a renovated barn. The Star Tribune reported sites at $29 a night. One family has come back about 10 times.
Hannah Bernhardt and Jason Misik raise beef, lamb, pork and eggs on nearly 160 acres at Medicine Creek Farm. They began hosting campers in 2022, partly to diversify their income. A remodeled vintage camper that sleeps two rents for $80 a night.
The same article reported Hipcamp saw a 47% rise in farm stays over two years.
Pink River Ranch, Wisconsin: One Airstream
Brit Thompson raises Highland cattle and Icelandic sheep. Reuters reported that she turned a vintage Airstream trailer into an Airbnb, and that its revenue "far outpaced" what she made selling beef and lamb to restaurants and directly to customers.
One trailer. Not a lodge.
Colony Acres, Iowa: An Honor-System Pumpkin Stand
Dean and Katie Colony didn't start with an event barn. They started by selling pumpkins on an honor system, just to see if anyone would buy. Over the years they added a corn maze and a 5K race.
Hold that thought. Their story is the bridge to everything that comes next.
Your Asset Map
Asset you already own | Visitor offer | Roughly what it needs to start | Real example (sourced) |
|---|---|---|---|
Spare farmhouse bedrooms | Farm stay with meals | Low: no new building | Liberty Hill Farm, VT (7 guest rooms, started 1984) |
Spare cottage | Farm stay rental | Low: furnishing, permits | Hull-O Farms, NY ($350/night avg); Leaping Lamb, OR ($175-$400/night) |
Empty field | Pop-up campsite | Hired toilets £45/week, showers £80/week, 15% booking fee | Stitchpool, UK (about £9,500 profit in 4 weeks) |
Pasture and an old barn | Campsites plus barn rental | Low | Ranch Retreat, MN ($29/night) |
A camper or trailer | Glamping stay | Low | |
A crop field | Corn maze | About $25,825 a season (Rutgers 2013 example) | Swank Farms, CA (cherry shack ticket booth) |
Produce and a roadside spot | Honor-system stand | Low | Colony Acres, IA (pumpkins) |
The working farm itself | Paid farm tour | About $4,000 fixed costs (Rutgers example) | Liberty Hill Farm milking tours |
Figures come from the sources in each story above. "Low" means the source gave no start-up dollar figure and no new building for the business was reported.
Field-Tested Play: Before you price a single board of lumber, list five things on your farm that a city family would pay to see, do or sleep in. Circle the one that needs the least spending. That's your test. For more ideas, read how to launch agritourism using only the infrastructure you already own and asset-light agritourism: monetize your farm without building a thing. |
Got an old barn? Read what to do with an old barn. Just check whether your barn is legal for visitors before anyone walks in.
The Field-Tested Ladder: Test, Prove, Plan, Then Borrow
Back to the Colonys.
After the honor-system pumpkins, the maze and the 5K, they kept building the business. More than 15 years in, they built a climate-controlled event barn with a commercial kitchen. It seats 170 for banquets or 200 for conferences, and it was finished before the 2023 season.
And they didn't walk into the bank with a hunch. Their Iowa Small Business Development Center adviser, Paul Heath, helped them build 2-, 5- and 10-year projections. Katie said the projections were "to justify getting mortgages and loans we needed."
Her other line sticks with me: "We needed more data to make sense."
By 2024, Colony Acres was drawing more than 20,000 visitors a year.
Here is the ladder:
Step 1. Test. One weekend event. One honor-system stand. One spare room listed for a month. Use what you own and spend little. My guide to testing agritourism with a 60-minute MVP shows how.
Step 2. Prove. Track every visitor, every dollar in and every dollar out for a full season, ideally two. Real numbers beat any spreadsheet guess.
Step 3. Plan. Turn those numbers into a written plan: monthly cash flow, a DSCR, and a bad-weather version.
Step 4. Borrow, only if the plan says so. If the numbers show the loan gets repaid with room to spare, a loan becomes a tool. If not, you just saved your farm from a mistake.
Use the free Agritourism Revenue Calculator to rough out your numbers before Step 3.
Reality Check: When Borrowing Runs Ahead of the Business
Reality Check: Big venue projects on big loans can go wrong. Two public cases show what can happen when loan payments meet a business that can't carry them. In both, other factors played a part, so read them as warnings, not blame. |
The Retreat at Jarrett Farm, Oklahoma. This began as a dairy farm in 1946. It was sold in 1984 to become a country inn. By the time its current owners bought it in 2021, it was a resort and venue, not a working farm. Local news reported their plan to turn the 114-acre property into a 13-suite resort and event center.
Court records reported by Bartlesville Radio show they stopped paying the mortgage, and the loan went into default in December 2023. The same records showed a default of more than $1.5 million against an assessed value of $1.2 million.
News On 6 reported the owner said he had signed a loan with an increasing interest rate. The owners argued in court that the terms were "unclear and misleading." They lost in Washington County District Court and at the Oklahoma Court of Appeals, and Bartlesville Radio reported they then petitioned the Oklahoma Supreme Court. The bank took ownership at a sheriff's sale in August 2025 (pending court confirmation at the time), the owners filed Chapter 11 that September, and News On 6 reported that the venue's final day of operation would be October 27, 2025.
Historic John P. Furber Farm, Minnesota. Wayne and Angela Butt bought the farm in 2010 and turned it into a wedding venue in a renovated dairy barn. In 2023 they opened a second wedding barn. The Star Tribune reported it abruptly closed in April 2024; the owners blamed rising costs, a changing economy and competition from newer businesses.
Their company filed Chapter 11 in June 2024, listing $2.8 million in assets and $3.3 million in liabilities. The Star Tribune reported a $2.3 million secured claim from the bank. Its debts also included court judgments and customer lawsuits, not just the bank loan.
What do these have in common? Heavy debt on a venue business, and payments that became hard to carry once conditions changed.
Your loan payment doesn't care about rain, a bad season or a new competitor down the road. That's why the ladder puts borrowing last. If you're already feeling the squeeze, read the farm bankruptcy warning signs first.
Where the Money Can Come From (and the FSA Fine Print)
Sometimes you will need to borrow. A proven farm stay may need a bathroom. A proven maze may need parking. Here are the main doors to knock on.
Program | Up to | Term | Rate (Nov. 2026) | Notes |
|---|---|---|---|---|
FSA operating microloan | $50,000 | Up to 7 years | 5.625%; capped at 5% for beginning and veteran farmers | Simpler paperwork; for small, beginning, niche and non-traditional farms |
FSA ownership microloan | $50,000 | Up to 25 years | 6.25% | Same agricultural-purpose rules |
FSA direct operating loan | $400,000 | 1 to 7 years | 5.625% | Must be unable to get credit elsewhere at reasonable terms |
FSA guaranteed operating loan | $2,558,000 | 1 to 7 years | Set by lender (FSA caps the maximum) | Made by your bank, FSA guarantees part |
Farm Credit YBS programs | Varies by association | Varies | Varies | For young, beginning (10 years or less) and small farms |
SBA microloan | $50,000 | Up to 6 years | Generally 8% to 13% | Through nonprofit lenders; average about $13,000; no real estate |
Vermont Community Loan Fund Agritourism Loan (VT only) | $50,000 | Up to 20 years | Fixed from 3% | For parking, restrooms, signage, guest safety |
That beginning and veteran farmer cap is worth knowing. FSA's microloan fact sheet says operating microloan rates follow regular FSA operating rates, "except for Beginning and Veteran farmers where the interest rate is capped at 5%." With today's rate at 5.625%, that cap matters.
Illustrative example: $50,000 over 7 years at 5% costs about $9,362 in interest. At 5.625%, about $10,604. That's roughly $1,241 saved. Confirm your eligibility with your local FSA office.
The Farm Credit System made 175,068 new loans to young, beginning and small farmers in 2025, totaling $38.2 billion, according to the Farm Credit Administration. Each association runs its own program, so call yours.
The Honest Part: Can FSA Money Pay for Agritourism?
Here's something I want you to hear from me before you hear it from a loan officer.
FSA farm loans are for agricultural operations. The federal rule, 7 CFR 764.102(f), says loan funds "will not be used to establish or support a non-eligible enterprise." The definitions include a business that mainly sells goods or services which may be farm-related but are not produced by the farming operation.
I could not find any FSA page that names agritourism either way.
My reading, and it's only a reading: things tied to what your farm grows, like U-pick or a farm stand selling your own crop, sit closer to the farm-production framing. Lodging, wedding venues and event spaces are more likely to fall outside it.
So before you plan on FSA money for a cottage or a venue, ask your local FSA farm loan officer directly. Get the answer early. Visitor income may still help show you can repay a farm loan, even if it can't be funded by one.
Don't Forget Grants
Grants don't need repaying. A USDA-funded agritourism research brief published by the University of Vermont found 70% of surveyed farmers picked grant programs and other financial resources as the support that would help them most. New Jersey announced a $5 million Agritourism Grant Program in December 2025, with awards up to $100,000. Airbnb and American Farmland Trust have offered Farm to Stay grants of up to $10,000.
Start with my agritourism grants and funding guide, then check agritourism grants by state for programs near you.
What a Lender Wants to See Before Saying Yes
Farm lenders use a checklist called the Five Cs of Credit. GreenStone Farm Credit Services and Farm Credit of the Virginias both explain it. In short:
Character: your management skill, experience and credit history
Capital: what you own versus what you owe, and your access to cash
Capacity: your ability to repay, based on your income and debt ratios, ideally shown under several repayment scenarios
Collateral: what secures the loan, and what it's worth
Conditions: the loan structure, the market and the rules
Notice that "Capacity" is just the DSCR in a business suit.
One trap hides in almost every seasonal visitor plan. I call it the August Gap. Agritourism cash is seasonal. Your loan payments aren't. A fall attraction can spend heavily all summer on seed, staff and marketing, then hit its lowest cash point right before the gates open.
A lender who sees a plan with a monthly cash flow, the August Gap marked, and a rain-day scenario sees someone who has done the work. That person gets taken seriously.
If you don't know how to build that, I wrote a guide for exactly this moment.
The Bank-Ready Agritourism Business Plan is a 38-page ebook in 11 short chapters, with 7 printable fill-in worksheets: a Loan Request Summary, an Executive Summary Builder, a Market Snapshot, an Offer, Pricing and Capacity sheet, Sources and Uses, a Three-Year Projection and DSCR, and Monthly Cash Flow and Risk Register.
It includes a complete illustrative sample plan for a fall harvest attraction, "Maple Hollow Farm," a $349,600 example with sources and uses, three-year projections, a 12-month cash flow and a rain-day stress test. You'll see exactly where its cash dips to minus $44,429 in August, and why.
You also get the Five Cs explained, DSCR made simple, a map of six places to borrow including USDA programs, a 10-minute lender presentation, a phone script, answers to the 9 toughest lender questions, 15 deadly mistakes, a 20-point Bank-Ready Scorecard and a 30-Day Path to the Bank, backed by 20 official sources.
It's $47 with a 30-day money-back guarantee. It can't promise a loan approval, and nothing honest can. What it does is help you walk in prepared.
Prefer to start free? Use my free agritourism business plan template.
Paperwork Questions to Ask Before You Spend (or Borrow) a Dollar
The cheapest mistake is the one you catch on paper. Take these questions to the right person:
Zoning (ask your county planning office): Is my visitor use allowed? Do I need a conditional-use permit, like Leaping Lamb did? In one Tennessee case, a farm couple spent about $30,000 on a new driveway and about $50,000 on legal fees, and a restraining order had stopped their weddings for more than three years. Read farm wedding venue zoning before you build anything for events.
Insurance (ask your agent): Does my farm policy cover paying guests? Do I need a rider or a separate policy? Start with what agritourism insurance coverage you need.
Liability law (ask your attorney): Does my state have an agritourism liability act, and does it require warning signs? See agritourism laws by state.
Taxes (ask your accountant): How is visitor income taxed? Does it affect my farm tax status? Here are the agritourism tax questions to ask your accountant.
Your existing loans (ask your lender): Does my current loan agreement limit new debt, or how I use the land and buildings pledged as collateral? Ask before you sign anything new.
What I Learned on My Own Farm
I founded Bloopy Durians in Bentong, Malaysia. Durian seasons are short, about four to five months a year, roughly December to February and June to August.
Short seasons teach you fast. You can't wait for the crop to carry the whole year.
So we built on what the farm already had. The durian trees. The ride in, which visitors make as a four-wheel-drive adventure. Tents can be pitched for customers who want to stay. The farm also keeps chickens, geese, ducks and fish.
Visitors now come from all over the world, and many companies send their staff and management to the farm. Bloopy Durians also has a WhatsApp list of loyal customers who buy durians whenever they are available. That list is a reliable source of income.
The farm has been featured in Bloomberg News and Asahi Shimbun. But the lesson isn't the press. It's that the trees and the land were already there. The job was to open the gate.
FAQ: FSA Loan Rates and Financing Agritourism
What are the FSA loan rates for November 2026?
Effective November 1, 2026: direct farm operating loans 5.625%, direct farm ownership 6.25%, joint financing 4.25%, down payment 2.25% and emergency loans 3.75%. Rates change monthly, so check the current FSA rates page before you apply.
Are FSA loan rates lower than bank rates?
Usually, yes. The Chicago Fed reported an average commercial bank farm operating loan rate of 7.12% in the second quarter of 2026, about 1.5 points above today's FSA direct operating rate. But FSA direct loans have limits and eligibility rules, including being unable to get credit elsewhere on reasonable terms.
Can I use an FSA loan to start agritourism?
Maybe, depending on what you build. FSA rules say loan funds won't support a "non-eligible enterprise," and I found no FSA guidance naming agritourism either way. Activities tied to what your farm grows may fit better than lodging or event venues. Ask your local FSA farm loan officer before you plan on it.
How much does it cost to start agritourism?
It depends on the activity. A Rutgers farm-tour example uses $4,000 in fixed costs. A Rutgers 5-acre corn maze budget totals about $25,825 for a season (2013 dollars). Farm stays in an existing cottage or spare room avoid the biggest cost of all: building.
What is a good debt service coverage ratio for a farm loan?
University of Illinois farmdoc daily says it's not uncommon for lenders to require at least 1.15 or 1.20, and 1.50 or higher is considered good. UW-Madison Extension calls below 1.25 a concern. Put simply: have $1.15 to $1.25 or more in spare cash for every $1 of loan payments.
Is there a lower FSA rate for beginning farmers?
For operating microloans, yes. FSA's microloan fact sheet says the rate is capped at 5% for beginning and veteran farmers. Confirm your eligibility with your local FSA office.
Should I borrow to build an event barn or farm stay?
Only after you've tested the idea, proved demand with real sales and written a plan showing the loan gets repaid with room to spare. Colony Acres in Iowa grew its visitor business for more than 15 years and built projections with an SBDC adviser to justify the loans for its event barn.
Is agritourism actually profitable?
It can be. The 2022 Census of Agriculture counted 28,617 US farms with agritourism income, bringing in $1.26 billion in total, about $44,004 in gross agritourism revenue per farm on average. A New Jersey study found agritourism significantly raised net cash income per acre, especially on small farms.
Your Next Step
FSA money now costs 5.625%. Bank money costs more. Every dollar you don't borrow is a dollar of interest you never pay.
If you will need a loan, walk in with a plan a lender can say yes to.
Not sure your farm is ready for visitors yet? Take the free quiz. It takes a few minutes and shows where your farm is strong and where it needs work.
And if you want ideas you can start without a loan, grab my free ebook, 150 Ways to Unlock Hidden Wealth From Your Farm. You get 150 money-making ideas in 10 income categories, 15 quick wins you can start for $5,000 or less, and a scorecard for every idea showing its difficulty, pricing and earning potential.
P.S. Remember the Swanks. A bank called in their loans. They had a field, an old cherry shack and a lot of nerve. After their sixth maze season, they handed USDA a check that paid off their long-term loan two years early. You don't need a fortune to start. You need a first step you can afford.
Stephen Loke of AgritourismSuccess.com, whose farm is featured in Bloomberg News and Asahi Shimbun. This article is general information, not financial, legal or tax advice. Rates change monthly; check current FSA rates and talk to your lender, accountant and attorney before you borrow.
Sources
USDA FSA: USDA Announces November 2026 Lending Rates for Agricultural Producers (Nov. 2, 2026)
Bonnie Swank: Swank Farms, a USDA California Success Story (FSA, 2008)
AgProud: Interest Rates Largely Unchanged in Q2 Reports (Sept. 24, 2026)
Farm Policy News: US Cropland Tops $6,000 per Acre for First Time in 2026
Rutgers/Northeast SARE: Financial Management, Budgeting and Pricing for Agritourism (Module 3)
farmdoc daily: Understanding the Coverage Ratio (Lattz, Jan. 18, 2017)
UW-Madison Extension Farm Management: Farm Finance Scorecard
Seven Days: Rochester's Liberty Hill Farm Has Embraced Guests as Family for Almost Four Decades
VTDigger: Agritourism Brings Second Income to Vermont Farmers (July 25, 2025)
Scenic Hudson: Overnight Stays Add Fun and Financial Stability to Valley Farms
NY Senate: Hull-O Farms Joins the State Historic Business Registry (July 13, 2023)
Farmers Weekly: How to Go About Diversifying Into Farm Pop-Up Campsites (Mar. 29, 2021)
Minnesota Star Tribune: The Latest Minnesota Camping Trend: Crops and Livestock (June 26, 2025)
Bartlesville Radio: Jarrett Farm Foreclosed On, Up for August Sheriff's Sale (July 24, 2025)
Bartlesville Radio: Equity Bank Takes Ownership of Jarrett Farm (Aug. 27, 2025)
Bartlesville Radio: Owners of Jarrett Farm Continue to Fight for the Property (Aug. 29, 2025)
Bartlesville Radio: Jarrett Farm Owners File Bankruptcy (Sept. 24, 2025)
News On 6: Jarrett Farms to Be Auctioned After Financial Struggles (Oct. 22, 2025)
Minnesota Star Tribune: Wedding Venue Furber Farm Bankruptcy (June 27, 2024)
Minnesota Star Tribune: Bankrupt Furber Farm in Cottage Grove Sold (Aug. 27, 2024)
eCFR via Cornell LII: 7 CFR 764.102, General Eligibility Requirements
eCFR via Cornell LII: 7 CFR 761.2, Abbreviations and Definitions
Farm Credit Administration: Young, Beginning and Small Farmers and Ranchers FAQ
Farm Credit Administration: 2025 YBS Mission Performance Report (Aug. 13, 2026)
UVM / USDA AMS: Brief Ten, Financial Support for Agritourism (2026)
Philadelphia Inquirer: Pennsylvania Farm Stays and Agritourism (Sept. 28, 2026)
Tennessee Lookout: Wedding Venue on Bedford County Farm Hits Legal Snag (Sept. 21, 2022)
NERCRD Data Brief: Agritourism in the 2022 Census of Agriculture (May 2024)
Schilling, Attavanich and Jin: Does Agritourism Enhance Farm Profitability? (JARE, 2014)
Comments