New loan program helps consolidate multi-owner reservation land

CROW CREEK, S.D. -- On South Dakota's Crow Creek Indian Reservation, one 40-acre piece of land has more than 1,600 owners. Rick Clifford, realty officer for the Bureau of Indian Affairs Great Plains Region, says the Crow Creek parcel is one of th...

Nick Nelson, Agweek

CROW CREEK, S.D. - On South Dakota's Crow Creek Indian Reservation, one 40-acre piece of land has more than 1,600 owners.

Rick Clifford, realty officer for the Bureau of Indian Affairs Great Plains Region, says the Crow Creek parcel is one of the region's most complicated ownership situations, but it's far from unusual to have hundreds or even thousands of owners on a reservation tract.

"Our average in the Great Plains Region is probably going to be around 60 (owners) or so," Clifford says. "But we do have some really highly fractionated parcels."

The reason things got so complicated is because of the General Allotment Act of 1887, also called the Dawes Act. The act gave pieces of reservation land to individual tribal members. When an allottee dies without a will, title ownership for the parcel of land is divided among heirs, giving each parcel an exponentially greater number of owners. The U.S. Department of Agriculture says there are more than 245,000 owners of 3 million fractionated land interests on approximately 150 Indian reservations.

A new loan program through Farm Service Agency seeks to help tribal farmers and ranchers consolidate agricultural land with multiple owners. The Native American Community Development Corporation Financial Services Inc., of Browning, Mont., recently was chosen as the first lender for the Highly Fractionated Indian Land Loan program, created by the 2014 Farm Bill.


Matt Harrington, ag business outreach coordinator for NACDCFS, says helping farmers and ranchers purchase majority stakes of the land on which they work will give tribal producers more control over their operations.

Clifford says people who want to lease reservation land can negotiate with owners, or, in a more common scenario, the BIA takes lease offers on bids, awards five-year contracts and splits the proceeds among owners. In either scenario, BIA has to approve contracts, he explains.

Lessees often would prefer to negotiate with the owners of the land, but with such complicated scenarios, they fall back on bidding through BIA, Clifford says. That means they are at the mercy of the bidding process to continue using the land. Plus, purchasing a controlling stake in the land outright can be complicated.

"This program was created to address a longstanding barrier to agricultural financing in Indian Country," says USDA Under Secretary Michael T. Scuse in a statement. "Working with intermediary lenders, the program allows USDA to help increase the availability of farm loans to Native Americans who want to start or expand a farming or ranching operation on Indian lands."

Harrington says NACDCFS held a producer meeting on Nov. 5 that drew more than 50 people from the Blackfeet Indian Reservation, where NACDCFS is located. Since then, they've had interest from producers on Montana's Crow Nation and from reservations as far away as Oklahoma. No loans have been given out yet, but Harrington says several people are in the application process.

"It's an excellent opportunity to be able to own your own land and have a little more control over it," Harrington says.

He says the program is comparable to the Land Buy-Back Program for Tribal Nations laid out in the Cobell Settlement Agreement, which provided $1.9 billion to consolidate fractional land interests. But that program puts newly consolidated interests in tribal trust ownership for uses benefiting the reservation community and tribal members, and it doesn't address individuals who want to buy controlling stakes.

Clifford, who had not heard of the new loan program, says the buy-back program has been a very popular way for tribal members with very small interests in land to sell out. Someone who gets $10 per year out of lease payments may be more interested in getting $120 up front to sell their portion, he says.


As the only financial company so far approved to work on the Highly Fractionated Indian Land Loan Program, NACDCFS will work with qualified producers anywhere in the country, Harrington says. Tribes and tribal members apply through NACDCFS, which will administer the loan for the applicant.

Harrington says the loan may be the easiest part of the buying process. With so many owners on many parcels of land, finding enough of them to encompass 51 percent or more of the ownership could be a struggle, and the BIA has to approve any deal.

"Finding them is a challenge," Harrington says.

Clifford agrees: "They have to want to sell it to you."

For more information on the Highly Fractionated Indian Land Loan program, visit or contact the local FSA county office.

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