fred at self-help.org
12-07-2004, 05:22 PM
<?xml version=3D"1.0" ?>
<html>
<head>
<title></title>
</head>
<body>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Self-Help announces
the release of a new research report on
financing barriers for small, sustainable farmers, “Funding the
New Harvest.” It is no secret that across the country demand fo=
r
organic and local foods is accelerating and entrepreneurial
farmers are responding to this demand. Further, this
phenomenon has the potential to aid in the revitalization of rural
areas and provide benefits to urban consumers. </span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Over the last two
years, Self-Help has been exploring this
question: are traditional lenders and CDFIs adequately assisting
these farms to grow? Focusing on North Carolina, our report
documents problems and recommends changes in the financing
infrastructure to better serve this new breed of sustainable
farming enterprise. Below is the report’s Executive Summary.=
60; </span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The full PDF text
of the report, including results of a survey of
organic farmers, is available on our website at:</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><a href=3Dhttp://www.self-help.org/communityimpact/sus=
tainabledevelopment.asp><font
face=3D"Times New Roman" size=3D"3"><span style=3D"font-size:12pt"><u>www.=
self-
help.org/communityimpact/sustainabledevelopment.asp</u></span></font></a><=
font face=3D"Times New Roman" size=3D"3">
</font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Comments and questions
are welcome and can be sent to me at
this email address.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Fred Broadwell</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Sustainable Development
Initiative</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Self-Help Credit
Union / Ventures Fund</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">301 West Main Street</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Durham, NC
27701</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">919-956-4400</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">++++++++++++++++++++++++++++++++++++++++++</span></font><=
/div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"4"><span style=3D=
"font-size:16pt">Executive Summary</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">What are the barriers
to appropriate credit for the growing
sustainable farming movement in North Carolina and how can
these barriers be overcome? </span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">This study uses
a literature survey, expert interviews and a
survey of 400 sustainable farmers. The target population is the
group of N.C. farms and related businesses that a) are small-
scale, b) use ecological farm practices like organic, c) produce
for local markets and/or d) produce specialty items. This study
is not focused specifically on certified organic or any one
production system. “Small” is defined as less than 50 acre=
s.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Arial" size=3D"3"><span style=3D"font-si=
ze:12pt"><u>Findings</u></span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Small, sustainable
farm enterprises are multiplying in N.C.,
reflecting growth both in demand for their products and
infrastructure to deliver them. North Carolina has 25,000 farm=
s
of less than 50 acres. There are 80 to 100 certified organic farms
in N.C. and many more that actively employ sustainable
methods, particularly in and near the Triangle, Asheville and
Boone. Farmers markets, subscription sales and other direct
sales are growing.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Private lenders,
government lending agencies and their
regulators are too often confused as to whether sustainable farm
enterprises are farms, hobbies or non-farm specialty businesses.
This has occurred as farmers have become more entrepreneurial
to reach specialty markets, while more and more non-farm small
businesses have entered the farm/food arena seeking markets.</span></font>=
</div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The size, production
methods and/or product offerings of these
enterprises may disqualify them for or hinder their access to
government farm loan programs. Farm loan programs have
evolved to better serve commodity agriculture, not
entrepreneurial farmers or non-farm specialty businesses that
have some connection to agriculture.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The farm-like qualities
of these enterprises may disqualify them
for or hinder their access to government small business loan
programs. While the Small Business Administration and related
programs typically do not forbid access by farm-related
businesses, these programs are generally not prepared to serve
hybrid businesses that blend agricultural and entrepreneurial
activity.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Many sustainable
farms are start-ups and as a result may have
difficulty qualifying for government farm or small business loan
programs. Requirements that a farm or business have three to
five years of operating history shuts out promising new
entrepreneurs.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The debt aversion
of sustainable farm entrepreneurs, borne of
years of watching painful farm foreclosures, may hinder practical
use of debt to grow the industry. While farm families can be
understandably reluctant to mortgage farm property, real estate
collateral is commonly and effectively used by many non-farm
entrepreneurs. In addition, debt for other needs such as
equipment may be underutilized due to lack of comfort with the
lending process or lack of knowledge of loan programs and
products.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The farmers we
surveyed expressed little knowledge of USDA
Farm Service Agency programs, a primary federal source of
assistance to farms.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Sustainable farm
enterprises have small-scale capital needs,
indicating an opportunity to explore micro-credit programs.
Two-thirds of farmers surveyed who expressed a need for loans
desired less than $50,000. The funding needs of sustainable
farms are diverse and include equipment, buildings, land,
marketing and R&D.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Overall capital
demand for these enterprises represents a
substantial potential market for lenders. Since these operations
expect to match debt to equity 50-50, if each of North Carolina’s
25,000 small farms borrowed the median amount from our
survey ($16,500) demand would top $200 million. Demand
from the 400 sustainable farms surveyed would top $3 million. </span=
></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Sustainable farm
enterprises believe that cash flow and weak
markets are major hurdles to financing, and not that lenders are
biased against them, organic or their lifestyle choices.</span></font></di=
v>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Arial" size=3D"3"><span style=3D"font-si=
ze:12pt"><u>Recommendations</u></span></font></div>
<font face=3D"Times New Roman" size=3D"3"><span style=3D"font-size:12pt=
">1. The lending community should
facilitate farm entrepreneur
access to outside training and technical assistance regarding
capitalization and business plan development. Lenders can learn
about, network with and support these technical assistance
providers.</span></font></p>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">2. A third
party institution should oversee data collection on
specialty and organic crop production and prices so that farmers
and lenders can use them in business planning and underwriting.
The NC Department of Agriculture currently does this for
conventional farmers.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">3. Lenders
should actively support efforts to improve the
infrastructure needed to bring niche and organic products to
market. For example, lenders could provide financing and other
support to community farmers’ markets, farmer cooperatives and
retailers selling organic/local produce.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">4. Financial
institutions should undertake efforts to become
better educated about sustainable agriculture and the resulting
business opportunities. Lenders will need to monitor the rapid
pace of developments in this business sector. Self-Help has
developed materials that outline how financial institutions can
better underwrite to this sector and will share those materials
with the financial sector.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">5. The USDA
Farm Service Agency, Farm Credit System
institutions, the U.S. Small Business Administration and other
lenders should investigate ways they might improve marketing of
their programs and products to sustainable farmers, encourage
entrepreneurial farming through collaboration and training, and
reform underwriting and program rules to increase access to
credit by sustainable farmers.</span></font></div>
<font face=3D"Times New Roman" size=3D"3"><span style=3D"font-size:12pt=
">6. Federal/state government
officials, community development
financial institutions (CDFIs) and other interested funders should
investigate incentives such as dedicated loan capital and/or credit
enhancements. CDFIs should explore the opportunity to be a
new conduit for small farm finance to the extent that this fits
their historic mission of rural development, new enterprise
development and bridging credit gaps.</span></font></p>
<div align=3D"left">
</div>
<div align=3D"left">
</div>
<div align=3D"left"></div>
</body>
</html>
This post transferred from the cdb-l mailing list
<html>
<head>
<title></title>
</head>
<body>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Self-Help announces
the release of a new research report on
financing barriers for small, sustainable farmers, “Funding the
New Harvest.” It is no secret that across the country demand fo=
r
organic and local foods is accelerating and entrepreneurial
farmers are responding to this demand. Further, this
phenomenon has the potential to aid in the revitalization of rural
areas and provide benefits to urban consumers. </span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Over the last two
years, Self-Help has been exploring this
question: are traditional lenders and CDFIs adequately assisting
these farms to grow? Focusing on North Carolina, our report
documents problems and recommends changes in the financing
infrastructure to better serve this new breed of sustainable
farming enterprise. Below is the report’s Executive Summary.=
60; </span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The full PDF text
of the report, including results of a survey of
organic farmers, is available on our website at:</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><a href=3Dhttp://www.self-help.org/communityimpact/sus=
tainabledevelopment.asp><font
face=3D"Times New Roman" size=3D"3"><span style=3D"font-size:12pt"><u>www.=
self-
help.org/communityimpact/sustainabledevelopment.asp</u></span></font></a><=
font face=3D"Times New Roman" size=3D"3">
</font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Comments and questions
are welcome and can be sent to me at
this email address.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Fred Broadwell</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Sustainable Development
Initiative</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Self-Help Credit
Union / Ventures Fund</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">301 West Main Street</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Durham, NC
27701</span></font></div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">919-956-4400</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">++++++++++++++++++++++++++++++++++++++++++</span></font><=
/div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"4"><span style=3D=
"font-size:16pt">Executive Summary</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">What are the barriers
to appropriate credit for the growing
sustainable farming movement in North Carolina and how can
these barriers be overcome? </span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">This study uses
a literature survey, expert interviews and a
survey of 400 sustainable farmers. The target population is the
group of N.C. farms and related businesses that a) are small-
scale, b) use ecological farm practices like organic, c) produce
for local markets and/or d) produce specialty items. This study
is not focused specifically on certified organic or any one
production system. “Small” is defined as less than 50 acre=
s.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Arial" size=3D"3"><span style=3D"font-si=
ze:12pt"><u>Findings</u></span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Small, sustainable
farm enterprises are multiplying in N.C.,
reflecting growth both in demand for their products and
infrastructure to deliver them. North Carolina has 25,000 farm=
s
of less than 50 acres. There are 80 to 100 certified organic farms
in N.C. and many more that actively employ sustainable
methods, particularly in and near the Triangle, Asheville and
Boone. Farmers markets, subscription sales and other direct
sales are growing.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Private lenders,
government lending agencies and their
regulators are too often confused as to whether sustainable farm
enterprises are farms, hobbies or non-farm specialty businesses.
This has occurred as farmers have become more entrepreneurial
to reach specialty markets, while more and more non-farm small
businesses have entered the farm/food arena seeking markets.</span></font>=
</div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The size, production
methods and/or product offerings of these
enterprises may disqualify them for or hinder their access to
government farm loan programs. Farm loan programs have
evolved to better serve commodity agriculture, not
entrepreneurial farmers or non-farm specialty businesses that
have some connection to agriculture.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The farm-like qualities
of these enterprises may disqualify them
for or hinder their access to government small business loan
programs. While the Small Business Administration and related
programs typically do not forbid access by farm-related
businesses, these programs are generally not prepared to serve
hybrid businesses that blend agricultural and entrepreneurial
activity.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Many sustainable
farms are start-ups and as a result may have
difficulty qualifying for government farm or small business loan
programs. Requirements that a farm or business have three to
five years of operating history shuts out promising new
entrepreneurs.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The debt aversion
of sustainable farm entrepreneurs, borne of
years of watching painful farm foreclosures, may hinder practical
use of debt to grow the industry. While farm families can be
understandably reluctant to mortgage farm property, real estate
collateral is commonly and effectively used by many non-farm
entrepreneurs. In addition, debt for other needs such as
equipment may be underutilized due to lack of comfort with the
lending process or lack of knowledge of loan programs and
products.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">The farmers we
surveyed expressed little knowledge of USDA
Farm Service Agency programs, a primary federal source of
assistance to farms.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Sustainable farm
enterprises have small-scale capital needs,
indicating an opportunity to explore micro-credit programs.
Two-thirds of farmers surveyed who expressed a need for loans
desired less than $50,000. The funding needs of sustainable
farms are diverse and include equipment, buildings, land,
marketing and R&D.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Overall capital
demand for these enterprises represents a
substantial potential market for lenders. Since these operations
expect to match debt to equity 50-50, if each of North Carolina’s
25,000 small farms borrowed the median amount from our
survey ($16,500) demand would top $200 million. Demand
from the 400 sustainable farms surveyed would top $3 million. </span=
></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">Sustainable farm
enterprises believe that cash flow and weak
markets are major hurdles to financing, and not that lenders are
biased against them, organic or their lifestyle choices.</span></font></di=
v>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Arial" size=3D"3"><span style=3D"font-si=
ze:12pt"><u>Recommendations</u></span></font></div>
<font face=3D"Times New Roman" size=3D"3"><span style=3D"font-size:12pt=
">1. The lending community should
facilitate farm entrepreneur
access to outside training and technical assistance regarding
capitalization and business plan development. Lenders can learn
about, network with and support these technical assistance
providers.</span></font></p>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">2. A third
party institution should oversee data collection on
specialty and organic crop production and prices so that farmers
and lenders can use them in business planning and underwriting.
The NC Department of Agriculture currently does this for
conventional farmers.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">3. Lenders
should actively support efforts to improve the
infrastructure needed to bring niche and organic products to
market. For example, lenders could provide financing and other
support to community farmers’ markets, farmer cooperatives and
retailers selling organic/local produce.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">4. Financial
institutions should undertake efforts to become
better educated about sustainable agriculture and the resulting
business opportunities. Lenders will need to monitor the rapid
pace of developments in this business sector. Self-Help has
developed materials that outline how financial institutions can
better underwrite to this sector and will share those materials
with the financial sector.</span></font></div>
<div align=3D"left">
</div>
<div align=3D"left"><font face=3D"Times New Roman" size=3D"3"><span style=3D=
"font-size:12pt">5. The USDA
Farm Service Agency, Farm Credit System
institutions, the U.S. Small Business Administration and other
lenders should investigate ways they might improve marketing of
their programs and products to sustainable farmers, encourage
entrepreneurial farming through collaboration and training, and
reform underwriting and program rules to increase access to
credit by sustainable farmers.</span></font></div>
<font face=3D"Times New Roman" size=3D"3"><span style=3D"font-size:12pt=
">6. Federal/state government
officials, community development
financial institutions (CDFIs) and other interested funders should
investigate incentives such as dedicated loan capital and/or credit
enhancements. CDFIs should explore the opportunity to be a
new conduit for small farm finance to the extent that this fits
their historic mission of rural development, new enterprise
development and bridging credit gaps.</span></font></p>
<div align=3D"left">
</div>
<div align=3D"left">
</div>
<div align=3D"left"></div>
</body>
</html>
This post transferred from the cdb-l mailing list