Smarter Farmers, Smarter Lenders: Educating Toward a Sustainable Community

Final Report for ENC03-073

Project Type: Professional Development Program
Funds awarded in 2003: $90,000.00
Projected End Date: 12/31/2005
Region: North Central
State: Minnesota
Project Coordinator:
Carolyn van Schaik
Land Stewardship Project
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Project Information


We have made an organized response to the myths and misunderstandings unveiled in the analysis of surveys to lenders, educators, and sustainable farmers delivered in 2002- 2003. Field days targeted lender/educator needs for on-farm exposure to sustainable practices. Business planning and credit/loan workshops as well as a scholarship fund have addressed the need for record keeping by farmers. We made great strides with two major organizations of lenders and agriculture educators via presentations and on-going dialogue. Judging by the continued press on the topic, these efforts have generated an interest in “smarter” credit for sustainable farmers and the records such credit entails.

Project Objectives:
  1. Credit liaison training - Training people to be credit liaisons provides the beginning farmer - and a prospective banker - with a bridge across one of the most confusing and intimidating aspects of farming, accessing needed credit.

    Business planning workshops - Two hands-on business plan training programs will be offered. Participants will be farmers and agriculture educators, the latter whom will be paired with willing farmer participants. The course will be held in Western and Southeastern Minnesota.

    In-service/farm tours - Lenders and educators alike have expressed the need and enthusiasm for learning about sustainable agriculture by going to the source. Accordingly, four or more farm tours and in-service presentations will be arranged with lenders, educators, and farmers in mind. More formal indoor venues will be included at the recommendation of several lenders.

    Partial scholarships - In order to provide on-going farm business training, cross-fertilization between Farm Business Management instructors and sustainable farmers, the beginning of a viable data base of sustainable agriculture enterprises, and gain the attention of some lenders, partial scholarships will be provided to Farm Beginning™ graduates to enroll in the Farm Business Management Program.

    Roundtable - A working group of lenders, Extension Service educators, FBM instructors, related credit and business trainers, and Farm Beginning™ participants will convene to describe, validate, and improve respective program materials that relate to credit access for sustainable agriculture enterprises.

    Whole farm planning short course/farm tour - Two, day-long introductions to Whole Farm Planning (WFP) will be offered to Western and Southeastern Minnesota lenders, educators, and farmers. Farm Beginnings™ graduates and staff as well as WFP trainers and graduates will provide the basics of this as well as the on-farm component dedicated to the specifics of sustainable agriculture.

    Written outreach - While the proposal puts a strong focus on hands-on and face-to-face work, some degree of written outreach is needed to touch those who cannot make it to organized events.


In attempting to unveil and substantiate some of the ideas that sustainable farmers, lenders, Extension educators, and Farm Business Management/Production instructors have about farming beyond the corn-bean-confined livestock arena, 1,600 targeted surveys were conducted in 2002 in Minnesota and Wisconsin (LNC00-200). Survey respondents unveiled four basic needs:

exposure to sustainable farmers and farming/marketing enterprises by educators and lenders;

record-keeping and written business plans by farmers;

a data base of sustainable farming/marketing financial numbers by all parties;

to find common ground in how farmers and lenders “plan for profit.”

The desire for smarter and greater access to credit by sustainable farmers fuels a continued interest in practical responses to what those 2002 surveys suggest to be windows of opportunities. Sustainable farmers who say they are at least as profitable as conventional peers but don’t have the records to prove it need to learn how to write business plans. Lenders who indicate an overwhelming interest in sustainable farming credit but are viewed as closed-minded by farmers need exposure to those farmers in their own places. Educators – Extension and Farm Business Management instructors, for example – who report good working relationships with sustainable farmers and lenders but are not viewed as resource people, could be with some encouragement.

In fact, farmers and bankers have a lot to learn about and gain from each other. And educators, with a knowing foot in each camp, might serve as a bridge if one of their goals is smarter and greater access to credit for sustainable farmers. Local bank health is improved by local investment, local land use is improved by sustainable farming, and rural communities are made stronger when banks and farmers support each other.

Accordingly, principle activities included business plan training for farmers, credit/loan training for farmers, and one-on-one financial planning with people who understand sustainable farming as well as the legitimate needs of agriculture lenders. Proposed also were a series of field days to give lenders and educators requested exposure to sustainable enterprises, a facilitated review of the several ways in which lenders and farmers plan for profitability, and a quick peek into Whole Farm Planning. The project was designed with significant input by Extension educators, Farm Business Management instructors, lenders from several institutions including independent banks and the Farm Service Agency, Farm Beginnings™ graduates and trainers, and several others who played a critical role in the design and execution of the initial surveys.


Click linked name(s) to expand/collapse or show everyone's info
  • Gigi DiGiacomo
  • Loel Gorden
  • Dean Harrington
  • Lou Anne Kling
  • Peter Scheffert
  • Stuart Shelstad
  • David Skillbred
  • Farm Beginnings TM graduates
  • misc. instructors statewide
  • misc loan managers statewide/beyond

Education & Outreach Initiatives



Not addressed in this grant.

Outreach and Publications

Not addressed in this grant.

Outcomes and impacts:

Credit liaison training
The business planning workshops (Feb/Mar 2004) helped pave the way for credit/loan workshops. Though we had initially intended to train experienced farmers to themselves work with other farmers about going to the bank, we realized that the greater need lay with that second tier of farmer - specifically with regard to loan applications and related records. Students received eight to 12 hours of training on credit management, records, and line-by-line work on a loan application accompanied by a real case study.

Business planning workshops
We conducted successful workshops in southeastern and western Minnesota during January-March 2004 for 39 students. Most but not all were Farm Beginnings™ graduates or current participants, and they ranged from the landless and dreaming to full-fledged sustainable farmers on their second or third iterations of a business plan. Gigi DiGiacomo, principle writer of the “Building a Sustainable Business: A Guide to Developing a Business Plan for Farms and Rural Businesses,” along with a banker, a Farm Business Management instructor, a Farm Beginnings™ graduate, a private business consultant, and the students themselves provided the workshop expertise. No one disavowed the need for such plans, everyone struggled with them, and several have real plans and real financing to show for their labor. Students were clear in their evaluations that they had not been ready for such depth while in the Farm Beginnings™ course itself. All expressed conviction that the workshop was worthwhile and could be repeated. The problem of being just in the planning stage was a major deterrent for many students. The presence of experienced farmers was a powerful asset. Students actively participated in class; attendance was steady and high, though few did the carefully crafted homework. The inclusion of FMB and a lender provided the start and continuation, respectively, of solid relations that continue to bear fruit in this work, including a discussion to get instructor/student pairs to present to the FBM instructors at large. Next time, I will ask the landless to create a scenario in which to place themselves for the duration of the workshop and on which to base all number-crunching and practice decision-making. I also will make the workshop longer; I will charge money (even a little, or a sliding fee), and I will simplify it so that only one or two aspects of a business plan are covered and then really cover them, with hands-on required and budgeted in within the class as opposed to homework that falls prey to everyday life.

In-service/farm tours
We organized two fabulous farm tours with special invitations to lender/educator communities. Outreach to the lenders was strong; outreach to educators could have been better, and attendance at the second event was way better than at the first. Both events were open to Farm Beginnings™ graduates and to the public at large, and were well attended otherwise. Regardless, they form part of the groundwork and “ammunition” for encouraging lenders to attend similar events as a way to address their self-avowed need for enterprise education. As a result of much behind-the-scenes work, we also were able to facilitate outreach in the banking community around public field events. We have also been able to nurture a willingness among some farmers to consider going to banker committees, perhaps with their own bankers in tow. Finally, we worked hard to combine a regularly scheduled banker meeting with a farm visit, though to no avail yet. Several pieces have since been written in lender publications and the project PI has presented to bankers several times over the past four years.

Partial scholarships
Nine sustainable agriculture farmers have received fee assistantships ranging from approximately $200 to $500 to offset the cost of record-keeping courses offered through the Farm Business Management Program. Recipients are obliged to “pay back” by contributing to a field day or other meeting. Instructors have agreed that their colleagues could benefit from hearing how they work with these alternative farmers, though we were not able to push that idea past verbal agreement.

Some of the goals of the roundtable were met, albeit in discreet meetings rather than everyone at one table, as initially envisioned. Players are increasingly speaking with the project PI but not with each other on topics pertinent to sustainable farmers.

Whole farm planning short course/farm tour
This proved a delicate objective that was not fulfilled per se. We have strengthening relations with lender and agricultural educator groups, and with farmers willing to talk numbers. The public attention on organic agriculture has been a door-opener (with some careful explaining). Our business planning workshops and record-keeping scholarship fund also have allowed for cross-fertilization and essential conversations. Field events for bankers reinforced the need to design this activity in a certain way – shorter, with a clear financial component, and probably in conjunction with an already-scheduled lender meeting so that there is a captive audience. Given the reality of cautious lenders and careful farmers, we have had to pick our way through and were unable to organize this event.

Written outreach
We’ve done a fair amount of writing and the work itself has been written up in lender (AgLender, Independent Community Bankers of Minnesota NEWS, Journal of Agricultural Lending), organic (Organic Broadcaster), sustainable (Land Stewardship Project Letter, Livewire, and LSP web), and SARE publications (Field Notes and the upcoming annual Highlights report), as well as in both agricultural and general media. The Farmer Lender survey results and a highlights sheet are on our web site:
The work was presented at the Upper Midwest Organic Farming Conference (February 2004) and at several Independent Community Bankers of Minnesota meetings. We have a one-pager on the overall project, and on things lenders could do to address the issues. I also have created a shortened version of a benchmark data report. All events generated press releases and sometimes follow up articles. There are other pieces – fact sheets mostly – that may happen yet with other funding.

Our greatest achievement to date is that we still have people who want to talk about credit issues and to learn about record keeping. In fact, we have even more people than when we started, and those people include lenders, farmers, and some within the agricultural educator community, our targeted audiences. The work has attracted attention to the concerns at hand – the need for bank-friendly records that lead to financed sustainable agriculture. We can point to participants who now have business plans and financing, both of which presumably (though there is no guarantee) increase the chances of better land management and smarter access to funds. Lenders really perk up at learning about benchmark data, especially when shown an example of a side-by-side price comparison (as with New Farm’s OPX). How could we have reached them with this gem if there hadn’t been conversations along the way? This accomplishment has reverberating impacts, ones that point to our long-term goals related to bank and farmer practices and the land and communities each supports.

Project Outcomes

Project outcomes:

Not addressed in this grant.


Potential Contributions

Not addressed in this grant.

Future Recommendations

We continue to see a deep need for record-keeping education and analysis for farmers and enterprise exposure for lenders. Our Farm Business Management instructors seem readier than ever to work with sustainable-oriented farmer students, and they need encouragement to move outside their everyday full plates. We also need to be connecting farmers and lenders with regional food consumption needs –- the latter may motivate the former to pay more diligent attention to one another.

Any opinions, findings, conclusions, or recommendations expressed in this publication are those of the author(s) and do not necessarily reflect the view of the U.S. Department of Agriculture or SARE.