Farm Financing: Measuring Profitability and Success

2012 Annual Report for LNE11-310

Project Type: Research and Education
Funds awarded in 2011: $79,720.00
Projected End Date: 12/31/2015
Region: Northeast
State: Massachusetts
Project Leader:
Julia Grigg
The Carrot Project

Farm Financing: Measuring Profitability and Success


The Carrot Project will work closely with 30 farmers desiring both business and financial management technical assistance and financing, with the goal of focusing on enterprise development and improved economic viability and profitability. Each applicant will be paired with a technical service provider for the duration of the project. Farmers and technical service providers will track enterprise changes over a two-year period; a report, case studies, and presentation materials — describing when financing is appropriate, and useful in increasing a farm’s economic viability — will result.

Objectives/Performance Targets

The Performance Target for this project is that 30 farmers without access to conventional credit will successfully complete enterprise plans; many of those 30 will complete applications for loans totaling an estimated $300,000 ($3,000 to $35,000 each). The farmers will use the enterprise plans and financing, if applicable, for projects to increase profitability and economic viability. An estimated two-thirds of farms will increase net farm income by 10% over two years; in dollar amounts, such an increase would represent approximately $150,000 in enhanced revenue by the end of the project (an average $7,500 increase per farm X 20 farms = $150,000). All participating farms will provide evidence thereof through unaudited financial statements, tax forms, and follow-up interviews.

We are currently halfway to our goal, with 15 farms registered, and anticipate registering the remaining farms by April 2013. More than 60% of the registered farms have completed their first season as part of the program and have submitted their base information (pre-surveys and enterprise plans). We will collect information on their first season during the Winter and early Spring of 2013. We are collecting initial information on another thirty-three percent of the registered farms.

Features of the farms registered to date include:

  • more than 60% are vegetable farms and more than 30% have some type of value-added products
    their sizes range from 2 to 540 acres; they include a 3,300-square-foot indoor growing space and 1 acre of rooftop garden
    seventy percent are in their first 3 years of operation
    approximately one-half gross from $25,000 to $125,000 (or more) annually
    they have set goals defining their success, including profitability or “living comfortably,” but also exhibit a strong emphasis on environmental sustainability and building their businesses in a way that embeds them as important parts of their communities
    they report moderate to strong business management skills and knowledge, but are less confident in their ability to translate that knowledge into specific results for their businesses
    more than 60% are seeking some form of capital for their businesses


Our approach is an 11-part process designed to meet the five Milestones and Performance Targets. Below each milestone is an update on the steps taken to reach it.

Milestone 1: 250 farmers learn about financing programs and request information by Fall 2013 (125 in both 2012 and 2013)

Finalizing Financial Tracking and Interview Tools: The financial tracking and interview tools are complete. They may be readjusted in the late Spring or early Summer of 2013 after we receive financial data from Year 1 of Group 1.

Farmer Outreach and Initial Farmer Contact: 4,200 farmers have learned about Measuring Profitability and Success and/or financing through various outreach activities, conducted electronically and as part of presentations or information exchanges. Approximately 26 farmers received information in one-on-one meetings or conversations with program coordinators. These conversations were initiated through various means.

Most farms that have registered have done so as the result of an ongoing relationship with a program coordinator or after more than one meeting. Electronic communication alone is not sufficient to register participants.

Milestone 2: 70 farmers decide to apply for loans and begin loan applications by Fall 2013 (35 in both 2012 and 2013)

The Decision to Apply for a Loan: More than 60% of the farms registered to date are seeking or have received a loan. After the grant was awarded, it was decided to emphasize technical assistance (in addition to financing) and its impact on a farm’s financial viability. Originally, farms registered fell into the following three categories:

  • those that complete an enterprise plan and the loan application without technical assistance and receive a loan
    those that complete an enterprise plan and the loan application with technical assistance and receive a loan
    those that complete enterprise plans with technical assistance and, in the process, determine that it is not the right time to apply for a loan, but have made changes to their businesses that should lead to measurable changes in their farms’ viability

There may also be participants that complete an enterprise plan with technical assistance and may apply, but do not receive financing during the grant period. Because we are also interested in the impacts of technical assistance, we have participants that are not considering financing at any time during the program.

It is clear that our projections for the number of farms applying for loans without technical assistance were too high. A significant number of loan applicants need business technical assistance before applying for financing, therefore the number of farms applying for loans will be fewer than 70.

Milestone 3: 30 farmers (of the 70 that begin loan applications) obtain or participate in business and financial management technical assistance to develop enterprise plans by Fall 2013 (15 in both 2012 and 2013)

Decisions about Technical Assistance: 15 farms have obtained or are participating in business financial management technical assistance to develop enterprise plans. Although this is one-half the desired number of registrants, we registered 8 before the first season. We were unable to begin outreach until the financial tracking and interview tools were complete, which didn’t occur until the end of January 2012; outreach began as soon as possible after that. Originally, we had hoped to start in November. This shorter outreach period made it difficult to register 15 farms before the first season because many farms had already started their planning for the season when they first heard about the program.

Milestone 4: 50 farmers (of the 70 that begin loan applications) implement enterprise plans, and 40–45 of that group also accept financing by Winter/Spring 2014 (25 in both 2013 and 2014)

Deciding to Apply for a Loan: We do not have data on this milestone yet. However, it may be unrealistic, given the type and number of farms we are working with to date. This milestone may be an artifact of trying to project participant behavior based on insufficient historical information.

Milestone 5: 30 farmers verify changes in economic viability and profitability by May 2015 (15 by 2014 and 2015, respectively)

Six-Month Check-in: Six-month check-ins have occurred from July through October 2012, and will begin again in January 2013. To date, these have been focused largely on collection of baseline information.

First Winter Check-in after Loan Is Received (Group 1): This will occur in the first quarter of 2013.

The following activities have not occurred:

  • Second Winter Check-in (Group 1)
    First Winter Check-in (Group 2)
    Second Winter Check-in (Group 2)
    Final Report, Presentation, and Case Studies

Impacts and Contributions/Outcomes

We cannot assess any impacts at this time. We will collect some comparative information this Spring (2013) and will begin the analysis at that time, primarily for the purposes of modifying our tracking tools and shaping the analysis when we have two years of data from at least one set of farms. Although it is not a part of the original proposal, this is also a point at which in-person team meeting would be helpful.


Mark Cannella

[email protected]
Farm Business Management Specialist
UVM Extension
617 Comstock Road Suite 5
Berlin, , VT 05602
Office Phone: 8022232389
Rachel Schattman

[email protected]
Bella Farm
PO BOX 107
Monkton, VT 05469
Office Phone: 8023731875
David Colson

[email protected]
Agriculture Services Director
Maine Organic Farmers and Gardeners Association (MOFGA)
PO Box 170
Unity, ME 04988
Office Phone: 2075684142
Julia Shanks

[email protected]
Food Consulting
Julia Shanks Food Consulting
37 Tremont Street
Cambridge, MA 02139
Office Phone: 6179458718
Chris Lindgren

[email protected]
North 30 Companies
9 Maple Hill Road
Weston, VT 05161
Gray Harris

[email protected]
Director Sustainable Agriculture and Food Systems
Coastal Enterprises, Inc.
30 Federal St
Brunswick, ME 04011
Office Phone: 2075504864
John Stoddard

[email protected]
Higher Ground Farm
24 Kent Street, Apt. 1
Boston, MA 02130
Office Phone: 6174358696
Benneth Phelps

[email protected]
Project Coordinator
TSNE- The Carrot Project
89 South Street, 7th Floor
Boston, MA, MA 02143
Office Phone: 4136506151