Smarter Farmers, Smarter Lenders: Educating Toward a Sustainable Community

Smarter Farmers, Smarter Lenders: Educating Toward a Sustainable Community

Summary

We have just ended this particular phase of 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 day outreach targeted lender/educator groups as part of an ongoing effort to meet their need for on-farm exposure to sustainable practices. Credit/loan workshops and a scholarship fund for Farm Business Management courses addressed the need for record keeping by farmers. We continued conversations with two major organizations of lenders and agriculture educators who increasingly work with sustainable farmers. We also began defining what the next body of work needs to look like to aptly address the need for “smarter” credit for sustainable farmers and the implications community-wide.

Objectives/Performance Targets

We are guided by the following sentiment, stemming from the SARE-funded surveys of farmers, lenders, and agriculture educators, and written in the final report (LNC00-200):

“The surveys allowed us to pull aside the protective curtain of distance from some serious issues related to credit and sustainable farming. While it is not all ugly, the picture that emerges suggests that myth and bias are not too strong for the barriers that stand in the way. Always, always, myth and bias are conquered best by up-close and personal time between those who would hold the barriers in place rather than remove them for the painful but rewarding journey forward.”

Seven specific areas of activity address our desired outcomes:
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.

2. 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.

3. 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.

4. 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.

5. 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.

6. 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.

7. 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.

Accomplishments/Milestones

Credit liaison training:
The business planning workshops (2004) helped pave the way for credit/loan workshops in November 2005. We had initially intended to train experienced farmers to themselves work with other farmers about going to the bank. During the course of initial planning, 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. Besides instructor Lou Anne Kling (director, FSA American Indian Credit Outreach Program and principle founder, Minnesota Farm Advocates program), participants benefited from much peer-to-peer exchange. Many were graduates of Land Stewardship Project’s Farm Beginnings™ training program – they said the opportunity for continuing education around a targeted subject was right for them.

In-service/farm tours:
As a result of much behind-the-scenes work, lenders received targeted notices of public sustainable agriculture field events as part of an ongoing attempt to bridge their self-avowed knowledge gap. We were able to find farmers willing to commit to 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, to no avail yet, though it remains actively on the table for 2006 (separate funding).

Partial scholarships:
Three more 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 (opportunity to do so planned for summer 2006 if separate funding comes through). 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.

Roundtable:
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. Last year’s 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 within the funding cycle.

Written outreach:
We continue to successfully integrate the survey findings and lessons into a range of public outreach vehicles, from state legislation quoting the survey to the annual SARE Highlights of 2005. All public events generated printed press releases and often follow up articles. We also learned this year that the initial Farmer Lender survey work has been selected for the national Agricultural Library collection. The Farmer Lender survey results and a highlights sheet are on our web site: www.landstewardshipproject.org/pdf/edsurvey.pdf.
There are other pieces – fact sheets mostly – that may happen yet with other funding.

Impacts and Contributions/Outcomes

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 continues to fuel 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. Farmers’ connections to a rural region’s overall economic health are pivotal, and this relationship is gaining more attention. The economic engine of sustainably raised food is just getting geared up, it feels. Smarter farmers and smarter lenders doing more business together make for a more vibrant Main Street.

Collaborators: