Slowly the lessons of micro lending are been applied to agriculture
as they should be. The potential happens to be huge and can
certainly massively expand agricultural output. I have already
posted on a range of such protocols and that includes the application
of modern high rise housing to the farm environment.
What has been poorly understood in the application of industrial
farming is that the dollar productivity on a per acre basis is low.
We are focused on commodity crops rather than value added crops
requiring Human input. Yet independent human input needs access to
capital in order to develop the profit stream. Land is often the
least of it when is is possible for five acres to produce as much as
a full square mile of land along with all the equipment. This may be
extreme, but it is also not an outlier either.
The real problem facing modern agriculture is a crisis in manpower.
That manpower needs to be vested in their business and often the land
itself. Centuries of land assembly and depopulation has effectively
eroded the value of farm land to it present low value. The process
is in need of reversal and micro finance is a good place to start.
Every grower is a potential farmer
Nothing small about
it: Microloans give new farmers a needed boost
By Rachel Cernansky
Nelida Martinez worked
as a farm laborer for big conventional farms in California for almost
20 years. But after her son, Danny, was diagnosed with leukemia, she
says, “I never wanted to work around chemicals again.”
Martinez started
selling vegetables from her community garden to help pay for her
son’s treatment (he has since recovered), and then got hooked up
withViva Farms, a farm incubator program in Washington state’s
Skagit Valley that helped her access land she could farm as if it
were her own. Now, Martinez has a three-acre plot there, leases
another two acres elsewhere, and sells more than 70 types of organic
vegetables at a farmers market, where she also makes fresh tortillas
and sells Oaxacan-style tacos.
Martinez wants to
expand her business, but access to credit or capital isn’t easy to
get if you’re not established. That’s exactly why she was chosen
to participate in a new microloan program designed to help small and
beginning farmers. Martinez is one of the first two bootstrappers to
receive funding from the Farmer Reserve Fund, a project launched
jointly by Viva Farms, Slow Money NW, and a local credit
union. She has received $2,000 to use primarily for buying seeds and
vegetable boxes. “The loan allows me to have more cash throughout
the season while I wait to harvest my crops,” she says.
This program is an
early example of something that could catch on around the country and
make a difference not only for participating farmers and their
families, but also for our nation’s food system. In the recent
past, microloans have often been used to help start or expand
businesses in developing countries, but the concept is now taking
off in the U.S. The U.S. Department of Agriculture even
proposed a microloan program for small farmers this spring.
Between that, the Farmer Reserve Fund, and other programs that have
sprouted up like it, this could be the next step for microloans, and
a promising future for beginning farmers in the U.S.
Once a farm gets to be
a certain size, farmers have a relatively easy time accessing credit.
“There are more government programs and [grants] for you once
you’re on a more solid footing,” says Ethan Schaffer, Viva Farms’
director of business and organizational development. And, even when
they’re just starting out, hipster farmerstend to have access
to family loans and low-interest credit cards. But many young farmers
— particularly Latino farmers — don’t have those options. So,
says Japhet Koteen, the Farmer Reserve Fund’s project manager, they
usually resort to high-interest credit. “Then they’re trying to
run a business with a 20 percent interest credit card,” he says,
which is not the best idea.
That’s why Viva
Farms screens and selects Farmer Reserve Fund applicants, Koteen
explains. They know the local farming community best and can help
farmers access loans based on more than just their credit history.
“The amount of
information that banks ask for with a regular loan is pretty small
when it comes down to it,” says Schaffer. “We have a huge amount
of information, probably more than a typical bank would have for a
loan. That’s kind of the secret sauce of the whole thing.”
In other words, the
personal and professional relationships are key. Viva Farms works
with farmers to develop business plans and requires on-farm
education, with a focus on financial literacy. Then the course
instructors for those programs will recommend a dollar amount for the
loan to the bank.
The Fund makes loans
of between $1,000 and $10,000 — amounts too small for most
financial institutions to bother with — for farmers with between
two and 10 acres of land.
“We found that
that’s where the largest gap is at the moment: that earlier stage,
for smaller amounts of money,” says Schaffer.
Koteen expects the
program to expand to other parts of Washington within the next couple
of months, and he thinks it’s replicable far beyond that, as well.
“There are other entities like Viva Farms who know there’s a need
and have existing relationships with these farmers,” he says.
Santiago Lozano, a
strawberry farmer who was chosen alongside Martinez in the first
round of loans, is excited about having $5,000 to spend on
strengthening his business. For one, he can now pay his workers
before the harvest is sold — something he wasn’t able to do last
year.
Plus, Lozano says:
“The loan makes it a lot easier to deal with emergencies, like when
I lost my strawberry crop this spring from all the rain. Now I have
enough to make it to the next harvest.”
It also helps him aim
high and dream big.
“Someday I want to
buy my own farmland. I like being able to hire my family and friends
and give them all jobs,” he says. “I wouldn’t work so hard if I
wasn’t working for my own dream. It’s beautiful really. It’s
important to have a dream and then make it happen.”
Rachel Cernansky is a
freelance journalist in Colorado. She focuses on the environment and
social justice, and you can find her on Twitter.
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