Final Report for LNE01-146
Project Information
- Farms for the Future began as a pilot program in August 2001 with the purpose of saving farmland by making selected farms more economically viable. In a year and a half 33 farmers received individualized assistance in developing business plans for ideas they had to improve their income. In exchange for this assistance they agreed not to develop their farmland for at least five years. A total of 4,121 acres have been protected in 12 counties.
To be eligible for the program, the farmer must be farming 5 or more acres he or she owns and have an idea for change to make the farm more profitable. It is a two phase program. Farms accepted into phase I work for 4 months to a year with a team of service providers and consultants to develop a business plan. The business plan thus developed is eligible for phase II funding of 25% of what is needed to implement the business plan up to $25,000.
This program was funded with $200,000 voted by the Maine legislature, a $145,000 NESARE grant and $100,000 in private funds raised by Coastal Enterprises, Inc.
The types of farms helped vary widely.
1 maple syrup
1 feeder calves
1 blueberries
2 vegetables
2 orchards
2 hay or grain
5 diversified
6 fruit and vegetables
6 meat (beef, veal, lamb)
7 dairiesThe ideas for change vary even more widely from purchasing more land to developing an exit strategy, from improving marketing to improving production and adding value. Dairies were helped transition to organic and to make and market compost.
In addition to the farmers we have helped directly we are raising awareness of business planning as a valuable tool in agriculture. Many of the farmers applying for the grants were more interested in the potential of getting cash in phase II of the program than in business planning. It has been gratifying to hear them express enthusiasm for the business planning phase.
Further, we have found that the method we are using for individualized business planning has benefited the service providers involved. Each farm receiving a grant has a team of service providers chosen, with their help, to work with them. The teams usually include a business counselor, one or more Cooperative Extension educators and other consultants appropriate to the particular change idea being explored. The discussions that take place in these meetings are generally an education for all improving the service provider’s ability to help other farmers.
Of the 33 farms going through the business planning process 24 submitted completed business plans for implementation grants. 17 farms received implementation grants totaling $369,639. These grants have been used to add and improve buildings, buy equipment, buy land, develop and build new equipment, install irrigation, improve marketing and build a farm store. It is too early to quantify the economic results.An independent evaluator of the program wrote:
We can however identify early indicators that suggest the Maine Farms for the Future Program will have an important, sustained and long term economic impact of returned revenue to the individual farmers participating in the program and to the state.-When asked about the financial impact of the Maine Farms for the Future Program, 100% of farmers responding to the survey indicated they believed that the services they received would help their farm become more profitable.
-Based on the formula used in the Massachusetts program, where the average-projected net income increases per farm is $19,000 for farms completing the implementation of their business plans, the benefit to Maine Phase II participants is approximately $495,000.
-Based on the formula used in the Minnesota program, where the economic leverage is based on formula where there is a $5 return to the farmers for every $1 of program dollars spent; the benefit to Maine Phase II participants and the state of Maine can be estimated at $1.7 million.
Introduction:
The Maine Farms for the Future program is an economic development strategy targeting farms. Although commonly viewed as an industry without much future, Maine agriculture actually has enormous potential for growth. Some great opportunities lie in niche products or specialty marketing: new territory for many Maine farms. Other opportunities lie in simply honing existing skills, or making new investments in proven practices. This program supports those farms that are trying to innovate or improve.
The MFFP provides selected farms with:
Phase 1, assistance in developing business plans aimed at increasing farm viability
Phase 2, a grant of 25% of the funds needed to implement the plan up to $25,000.
In exchange for a phase 2 grant, participating farms must enter into a farmland protection agreement that prevents their land from being developed for non-agricultural purposes for five years. The agreement may be terminated by paying back the grant.
Farms compete for the opportunity to receive program support, under a process established by the Maine Department of Agriculture and administered by Coastal Enterprises, Inc.
Selection criteria include:
-the degree of opportunity for increasing the vitality of the farm,
-the threat to the continuation of agricultural use of the land due to the management capability of the applicant to effect positive changes in farm operations and the financial capacity of the farm operation.
Many small-scale farmers have an idea for a new product or marketing strategy, but lack the resources to develop the idea into a viable business plan. The Program responds directly to this need with specialized business assistance. A team of service providers is assembled to meet the specific needs of each farm. There is usually at least one Cooperative Extension Educator and a Small Business Development Councilor (SBDC) on a team. Team members have been drawn from the Maine Department of Agriculture, Food and Rural Resources (MDAFRR), Natural Resources Conservation Service (NRCS), Maine Organic Farmers and Gardeners Association (MOFGA) and private consultants.
The Program is modeled after Massachusetts’ Farm Viability Enhancement Program, a highly successful initiative that has increased net annual income at participating farms by an average of $19,000. Massachusetts’ officials attribute their success to the fact that business assistance is: 1) provided by people with extensive farming knowledge; and 2) individualized to each client farm’s particular needs and opportunities. These hallmarks of success have been missing from many other attempts to enhance farm viability.
In the pilot stage of the program business plans were developed for 33 farms. $199,000 was awarded to ten farms to help them implement their plans. The program is continuing funded by a $2 million State bond. In 2003/04 44 farms received technical assistance. Half of these received grants totaling nearly $460,000. Over 12,000 acres has been protected from development through non-development agreements. 28 farms have been accepted in a 4th round. Support for the program is strong among farmers, service providers, the Dept. of Agriculture and state legislators which bodes well for the continuation of the program well into the future
Of the 130 Maine farmers (from small or medium sized farms) actively engaged in this project, 20 farmers will both increase farm profits and enhance the environment by implementing at least one (and possibly several) of the following new production or marketing practices:
This project is all about changing behavior. It is designed to:
-change how service-providers support these farmers
-change how these farmers research options and plan their future
-change how these farmers run their farms which will bring about economic change (Increase farm profits by an average of 20% by the end of the project ) and environmental change ( by
a) reducing use of pesticides, chemical fertilizers, and other external inputs;
b) reducing the amount of nutrients that threaten water quality; and
c) saving energy through reduced transportation of farm inputs and outputs.)
Cooperators
Research
This project was designed to increase the economic viability of a number of Maine’s small or medium sized farms, by providing those farms with technical assistance unlike anything that had been offered in Maine before. The technical assistance was:
-individualized to the specific needs and opportunities faced by a given farm
-substantive, in that it explored the detail of what’s possible (including preliminary testing of markets or farm practices) and resulted in detailed business plans
-delivered by a team that worked in true partnership, both with each other and the farmer
Essential Elements
Active, Useful Outreach. The project was designed to attract farmers to participate, not just through standard forms of outreach (mailings, conference sessions), but also by a series of engaging workshops to: a) showcase the success that some Maine farmers have had by moving toward more sustainable practices (by highlighting farmers who have participated in Working Landscapes, MOFGA programming, or prior NESARE projects); and b) provide farmers with a small degree of individualized technical assistance, as a taste of what this project could do for full participants. To this end, workshops used some of the players who would be involved in Technical Assistance Teams to provide basic feedback to attending farmers. Prior to the workshop, registered farmers completed a one-page questionnaire asking about current farm operations and any potential changes they were considering.
Competitive Application. The fact that farmers competed to receive technical assistance helped ensure that participating farmers did their homework.
Individualized, Substantive, Team-delivered Technical Assistance. The heart of this project is the Technical Assistant Team that was developed for each chosen farm. The Team—tailored to the farm’s specific circumstances--worked in partnership with the farmer. It usually included 3-6 persons who possess relevant skills or experience. Teams included other farmers, extension educators, experts in particular farm practices, academic researchers, and financial or marketing consultants.
Link to Implementation Funds. This project is linked to State funds that are available to help farmers implement their plans. The implementation grants, 25% of what is needed to implement the plan up to $25,000, are an important incentive to bring farmers into the program
130 farmers will reflect on how they might change their farm practices, as a result of having attended one of the project’s workshops or having otherwise discussed options with project staff. To be verified by staff interaction with farmers (through October 2002)
***134 farmers had attended workshops called to discuss the program or filled out a brief questionnaire which was used to mail applications, by October 2002. Over 200 applications were mailed to farmers.
45 farmers will develop initial plans for changing their farm practices, and spend time developing a proposal to receive project funds for focused technical assistance. To be verified by receipt of funding applications (in November 2001 and November 2002).
***78 applications were received in the given period. Thirty-two applications were received by the first deadline that was set for November 24, 2001. Forty-six applications were received for the second round deadline of August 29, 2002.
25 farmers will—in partnership with an individualized team assembled to serve each farm—undertake comprehensive planning processes for their farms (that may involve experimenting with new techniques, testing of equipment, feasibility studies, market analysis, or more) resulting in the development of detailed business plans. To be verified by each Technical Assistance Team’s interaction with a farmer (January 2002-October 2003).
***33 farm families worked with teams of advisors in this period. 15 farms were accepted in the first round and 21 in the second round (3 of the selected farms dropped out). Some of the projects explored during the business-planning phase Included:
-a more efficient way to dehydrate alfalfa
-add tourism to a farm operation
-develop organic poultry feed mill
-explore possibility of cutting costs by using alternative energy
-increase production and marketing options for organic blueberries
-diversify, increase value added, extend season and improve retail sales
-establish a cooperative to use fish waste in compost
-improve compost quality and make operation more environmentally sound
-sustainably produce dried apples
-conversion to organic dairy
-develop computerized soil/crop information system
-increase natural beef production
-develop an exit strategy
-market study into size of market for raw milk in glass bottles
20 farmers will implement more sustainable production or marketing practices as part of a new business strategy tailored specifically to their own needs and opportunities. To be verified by Team’s ongoing interaction with farmers. (November 2002-November 2004). NOTE: Approximately 15 of these farms are expected to apply for and receive a grant.
17 farms received implementation grants totaling $369,639. To the best of our knowledge all of the 33 farms that went through the business-planning phase have improved their sustainability.
Education
(taken from “Evaluation Report, Year 4 by Dahlia Bradshaw Lynn, PhD.)
1. Promoting the program to farms in the State
The general consensus is that the MFFP Program was largely successful in achieving the goals it established for promoting the program to farms in the state.
The outreach strategy had the capacity to provide broad geographic representation throughout the state and was actively pursued by program staff. This resulted in broad contact and ultimately participation throughout the state. Efforts included:
Brochures, background information, mailings and background sheets were distributed to key contacts in 494 municipalities, 40 Agricultural Associations, 30 Extension Districts, 79 Maine Land Trust Organizations and 105 Resource Provider Organizations.
Feature articles in newsletters including The Farm Bureau Newsletter, the Maine Vegetable and Small Fruit Growers Association, the Maine Sheep Breeder Association, SWCD Newsletter, Country Folks, and Maine Farmland Trust Newsletter.
Staff attendance and staffing informational booths at key agricultural events throughout the state including Maine Farm Days and Common Ground Country Fair and the Maine Agricultural Show.
Active placement of information highlighting the success of small/medium farm support such as the Portland Press Herald Newspaper and the Bangor Daily News.
More than 78% of farmers who completed the participant survey indicated that they had learned about the Maine Farms for the Future Program through a variety of sources including newsletters, and information obtained through either attending workshops, or one of several community activities.
Approximately 82% of farmers surveyed reported that information provided to them by the Farms for the Future Program was key in their decision to applying for the program.
Outreach and Training Workshops
The general consensus of is that the MFFP was largely successful in achieving the goals it established for workshops and information sessions for applicants.
As will be described below, the information sessions and workshops were well received by farm owners and service providers. They were effective in introducing the participants to basic concepts underlying the program concept and providing an overview of the program planning process. Two aspects of participation are addressed in the workshops. First, farm owners are challenged to think and talk strategically about the future of their farm business. Participants discuss industry opportunities, their unique strengths, the interest of family members, and their goals as they develop a strategic plan for their business.
Second, the workshop is designed to help farmers take the time to talk honestly and creatively about their farm business and to understand the elements of the Farms for the Future Program. The outcome of the workshops with representatives of the program are participants who have begun to think about the development of a business plan, are beginning to determine were their farm business is going, and who understand the importance of engaging all family members in the decision making process.
Additional Project Outcomes
Impacts of Results/Outcomes
General public
-The governor, the state legislature and the voters of Maine all supported a $2 million bond issue to continue this program.
-To date 4,121acres of farmland has been put under 5 year non-development agreements.
Consultants and Service Providers
-32 Extension Educators have served on teams, some serving on as many as six teams in a single year. There has been a marked increase in enthusiasm in participation. As an example one EE who was too busy to return calls when contacted for Round I was on three teams in Round III and volunteered to be team leader for one.
-12 Small Business Development Center councilors who two years ago introduced themselves as having no experience with farms now include in their self-introduction the number of Farms for the Future teams on which they have participated.
-Organic consultants on teams for conventional farms and with conventional farming consultants have expanded the knowledge of organic methods to both farmers and service providers. In addition, conventional farming consultants have served on teams for organic farms and learned more about organic practices.
Some of the 33 individual farms entering the program in the first two years:
-The Alberts purchased a combine and grain mill and are now marketing organic poultry feed under the label Northernmost Feeds. Feed formulation and marketing plan were developed in Phase I. An implementation grant helped purchase the equipment.
-The Ells are converting blueberry land to organic u-pick and purchasing equipment for a sheep dairy.
-Apple Acres in Hiram, Maine is gearing up to take their specialty value added products, apple syrup and apple crunch, into national markets.
-The Bright Berry Farm on a hillside is terraced and they will be pumping water with wind power. They have added amenities for the public including parking for school busses.
-We facilitated the transfer of ownership of a strawberry farm to younger farmers who had been tending the land for several years. The key was to show the young farmers how they could manage the debt.
-A diversified organic farm on the city limits of Bangor will open their farm store in 2005. In the planning process it was determined zoning would not permit a store of adequate size. The farmers were encouraged to go to the city with their plans where they were able to receive required permits.
-The Roberts raise organic grass fed beef and lamb. Irrigation will help them fatten the animals in drought years and a building and some new fencing will keep the animals from damaging sod in a wet spring.
Economic Analysis
- Technical assistance for the business planning process cost under $5,000 per farm. Some of that money goes to Cooperative Extension and Small Business Development Centers (SBDC) through contracts with each. These fund are helping keep these agencies viable in tough budget times. The most significant long-term contribution this has for farmers is the education team members get from each other. SBDC councilors are learning about the business of farming which is entirely new to most of them. Most of the Extension Educators are learning what an important tool business planning is for farmers and enough about the process to make them more valuable to farmers. This is an especially powerful learning tool as the team members are not dealing with theory or hypothetical situations but with real people, real situations and real problems in a real world. The value of technical assistance to the farmers is probably worth the cost making the educational value and the support for other agencies a bonus (or worth the cost of administering the program).
Farmers found business planning to be a valuable tool. An independent evaluator found:
“More than 82% of farmers who completed the survey indicated that the Maine Farms for the Future business planning process helped them identify strengths and weaknesses of their farm business. Approximately 73% reported that the process made them develop reasonable, attainable goals for their farm. They also reported that the business planning process helped them think more about the overall mission of their business (64%) and as importantly, respondents indicated that the process brought together family members and/or business partners for communication and decision making…
“The farm owner survey also gathered information about the ways in which farmers saw the usefulness of their written business plans for other activities and the extent farm owners anticipated enhanced profitability as a result of their participation in the program. Of particular interest is that 100% of survey respondents indicated they believed that the services they received under the Maine Farms for the Future Program would help their farm become more profitable.”
The implementation grants are the most expensive element of the program. We view these grants to be essential to the success of the program as they provide the incentive for farmers to do something most are not interested in doing. The majority of farmers who entered the program saw business planning as a hoop they had to get through to get the cash grant. Most gratifying to those working with the farmers was when they saw the value of business planning. A frequent comment was “Even if I don’t get the grant, this has been worth it.” The average amount of implementation grant money paid out for the first two rounds (33 farms in the business planning phase) was $11,201.
From the evaluation:
The general consensus is that the MFFP program has successfully met all programmatic objectives in enhancing the economic viability of Maine farmers funded by the program and does indicate contributions to the overall agricultural sector and the state economy.
We can identify early indicators that suggest the Maine Farms for the Future Program will have an important, sustained and long term economic impact of returned revenue to the individual farmers participating in the program and to the state.
When asked about the financial impact of the Maine Farms for the Future Program, 100% of farmers responding to the survey indicated they believed that the services they received would help their farm become more profitable.
Based on the formula used in the Massachusetts program, where the average-projected net income increases per farm is $19,000 for farms completing the implementation of their business plans, the benefit to Maine Phase II participants is approximately $495,000.
Based on the formula used in the Minnesota program, where the economic leverage is based on formula where there is a $5 return to the farmers for every $1 of program dollars spent; the benefit to Maine Phase II participants and the state of Maine can be estimated at $1.7 million.
Areas needing additional study
- Are we reaching all farmers with information about the program? Are there barriers that can be overcome?
We suspect there are farmers we have not reached who could benefit from this program. We have made adjustment along the way to make it easier to apply. The application is only two pages long. After the first round we stopped asking for several attachments which would take the farmer time to gather. The legislation was amended to eliminate the requirement that farmers sign a 5 year non-development agreement if they received a phase I grant. (They still have to sign a 5 year non-development agreement to receive an implementation grant.)
We would like to do a market survey of farmers who have not applied to the program to find out a) if they heard of the program, why they did not apply and b) if they have not heard of the program, what means should we use to reach them. Having done mailings to all farm lists we could find this survey will have to use other methods, perhaps door to door canvassing.
Is there a more efficient way to manage the business planning process?
In the 3rd round two administrators were able to handle 44 farms, just barely. We have found that the process works best if there is a good team leader. We have been learning what “good team leader” means and been able to identify several in our database. Perhaps developing “super team leaders” will make it possible to help more farms without adding appreciably to the administrative costs.
Should more business planning materials be used?
We have developed a business planning guide and a sample business plan to go with a business plan outline and benchmarks for developing the business plan within 4 months. The guide and sample are being used for the first time in Round 4 and their usefulness will be assessed. There is a danger in this approach and something that should be guarded against in the future. The longer the program is around, the more “advice” will be given. We need to be very careful not to loose one of the most unique aspects of this program--its individualized approach to each farm. Each farm is different, has different needs, a different personality. A strength has been that no one knew where the business planning process would end when the first meeting at the farm took place. Service providers who have become experienced in the program may have a tendency to move the group process in a direction that is familiar to them rather then to encourage thoughts to evolve.