Promoting sustainable agriculture by supporting the next generation of farmers
By Ariana Reguzzoni
It’s an alarming yet well-known statistic in the world of agriculture that the average age of the American small farmer is 58. As our farmers retire, will there be younger farmers coming in to replace them? In many cases, offspring and heirs have moved from the farm and are not interested in returning. The next generation of beginning and aspiring farmers, many of them first-timers, face big obstacles to getting started and succeeding as farmers. The top two are lack of access to land and lack of access to capital.
Without support from organizations like FarmLink, the next generation of small farms will cease to exist. As a result, the trend toward commercial agribusiness and away from family-owned and locally connected farming will only accelerate.
California FarmLink was founded in 1999 with the goal of keeping alive America’s small farm traditions. From the beginning, the non-profit connected retiring farmers to younger or beginning farmers and helped them establish land leases, succession plans, and mentorships to pass on their land and farming businesses. Back then, FarmLink’s staff consisted of one part-time person working out of a small office in Sacramento.
Fifteen years later, California FarmLink has grown to 13 staff members in three regions across the state and has helped more than 3,000 farmers find, lease, and buy land and over 1,500 farmers start and grow their farm businesses. FarmLink has also created a unique statewide micro-financing program for beginning, limited-resource, immigrant and underserved farmers.
Land Access Program
Three program coordinators covering three different California regions (Central Coast, North Coast and Central Valley) spend their days working with farmers who are looking for varying sizes and types of property to farm -— from less than one acre to 100 acres.
The organization has created an online land linking system to connect farmers with available land, enabling landowners to list properties, and landseekers to search the listings and contact landowners. Program coordinators visit retiring farmers and landowners to expand the land listings, assure that the properties are suitable for agriculture, and help prepare landowners for working with beginning farmers. They also coach beginning farmers on ways to seek and secure land tenure so they stay on and successfully farm the land they find.
When there is a fit between farmer and landowner, program coordinators are available to help negotiate and develop a lease that covers the issues and needs of both parties.
FarmLink also helps connect retiring farmers to resources to create viable succession plans, and runs a variety of workshops on all of these subjects to help educate the larger community. These events have shown that families are more likely to succeed in transitioning the farm to the next generation if FarmLink works consistently with that family, underlining the original mission of keeping more land in agriculture through generations.
All of this work has resulted in the nation’s most robust land access and linking program, with 25 to 30 new land tenure agreements, such as farm leases, purchases, or business successions,
being completed each year.
Capital Access Program
Fifty years ago, community and rural banks understood and served small-scale and diversified farming. These lenders have all but disappeared — replaced by a network of large banks and Farm Credit lenders that seldom make agricultural loans under $250,000. Smaller loans (in some cases as small as $5,000) are needed by beginning, organic, and sustainable farmers for production, equipment, and infrastructure to start and build their enterprises. These growers, who are frequently first-time farmers, have few options for financing their businesses, yet their success is the foundation of local food systems.
Recognizing this gap in availability of small loans, FarmLink created its own revolving loan fund in 2010 and has successfully raised $2.7 million in loan capital, leveraging USDA Rural Development funds to obtain investments from banks, foundations and individuals. In 2013, FarmLink received certification under the U.S. Department of the Treasury as a Community Development Financial Institution (CDFI) and became the first CDFI to exclusively serve farmers.
FarmLink’s loan officers work with partner organizations such as the Agricultural and Land Based Training Association (ALBA) in Salinas to help beginning, low-income, and immigrant farmers to obtain funding to start and grow their own businesses. These growers face numerous obstacles that include limited credit history, language or cultural barriers, little traditional collateral, a need for small loans, and non-traditional business models. FarmLink, unlike other lending institutions, has the ability to work with them to overcome these obstacles and address their needs. FarmLink loans enable growers to purchase production needs such as seed and plants, equipment, and farm supplies, and employ needed workers for production and marketing of a wide variety of crops, including vegetables, berries, herbs, eggs, poultry, and enterprises such as cheesemaking.
Another way FarmLink goes above and beyond the capabilities of larger lending organizations is to provide one-on-one technical assistance to help farmers manage business financing and build long-term viability in the mainstream economy. Farmers learn about operating, infrastructure, and land loans, how to prepare for taxes, develop cash-flow projections, build, maintain and repair credit, and develop relationships with a variety of farm lenders. This assistance and support helps ensure that the farmers are able to effectively use the funds they borrow to advance their financial independence.
Since the inception of the loan program, FarmLink has closed 100 flexibly structured and affordable loans averaging $27,000 in size, for a total loan volume of almost $3 million. In 2014 alone, they made 42 loans totaling $1.2 million. FarmLink is preparing for continued growth, and is launching a land loan program in 2015 to help organic and sustainable farmers purchase property to gain land security and invest in long term improvements to soil and infrastructure.
Throughout its development, FarmLink has sought economic opportunity, social equity, and environmental sustainability in its support for beginning and retiring farmers and landowners and with continued support from government and the community, they plan to continue to fill this unique role for years to come.
For more information visit FarmLink at californiafarmlink.org.
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