Plan Ahead To Secure Farm Funding
April 1, 2015 You are a young grower, either just starting out or you are looking to expand your operation. Where do you turn for financial assistance? Fortunately, you have options.
Some of you will opt to apply for grants while others will choose to go the farm loan route. Obviously, the grants do not have to be paid back. The loans, on the other hand, do.
Helen Husher, publications and public information coordinator with Northeast SARE (Sustainable Agriculture Research & Education), which is supported by USDA, says she often tells young specialty crop growers seeking funding to check out the Start2Farm.gov website. This resource pulls together information about grants as well as information about the Beginning Farmers and Ranchers Development Program, which is administered by USDA’s National Institute for Food and Agriculture.
“One of the first things you’ll learn on the Start2Farm website is there won’t be grants for everything you would like,” she says. “Finding grants for land, tractors, and other major farm improvements is very difficult.”
Keep The Big Picture In Mind
All USDA programs look at the overall situation and not just what will benefit one grower, Husher says.
“[The project] has to benefit some specific group or community which will meet USDA’s goals,” she explains.
“You can’t just say ‘I want to plant 4 acres of sweet corn,’” Husher continues. “There has to be a viability plan and the grower must have drawn on other technical resources, such as Extension agents, to develop the plan. You need to remember that you are asking an organization to make an investment, and that investment should pay off. What the payoff is will vary by the grant program, but in general there is no substitute for good planning.”
The big variable is which organization is being asked for money.
“Each grant program is looking for something different, so know your funding source,” Husher explains. “You need to read up on what [the funding organization] wants and is ready to invest in, and determine if what you want is in line with what they care about. Every funding source is slightly different and that is true whether you are applying for USDA funds or if you are getting money from a foundation or a nonprofit. Figure out if what you want to do can be written in a way that will fit the criteria of a specific group.”
Maintain Open Communication
So you have done your homework, submitted the application, and four to seven months later, you got word that you will receive a grant for your project. How are the funds disbursed?
Husher says many programs pay by reimbursement, which again requires planning on your part.
♦ 4 Tips To Secure Farm Funding ♦
“Normally you invoice back to the agency, and it will send you a reimbursement check. It is important to note, though, that sending the check is often contingent on reporting,” she says. “Some programs want reports quarterly, and some, like the SARE program, look for reports once a year.”
For more information about SARE funding, go to SARE.org/Grants.
The Microloan Program
For those interested in farm loans, the Farm Service Agency (FSA) has a microloan program that is directed toward beginning farmers.
According to Jim Radintz, acting deputy administrator for Farm Loan Programs, the microloan program was launched about two years ago and covers operating credit up to $50,000. Radintz says the program was developed because FSA’s existing operating loan program wasn’t fitting the needs of beginning growers.
“We were asking for the same information and going through the same processes whether someone was asking for a $20,000 loan or a $300,000 loan,” he explains. “We designed the program around specialty growers and we have shaped that program to accommodate people just getting started in a specialty operation. It is not limited to [beginning specialty crop producers] but we specifically had that in mind when we designed that program.”
In some instances the loans have been used in combination with the Natural Resources Conservation Service’s Environmental Quality Incentives Program, which has done quite a bit of work with high tunnels.
“We have financed some CSA operations with basic machinery, like a small tractor, and covered input costs,” he says. “[Growers] can use the loan proceeds for anything related to their production: equipment, seed, fertilizer, fuel, chemicals, etc. We also can finance some value-added facilities as long as more than half of what they are selling they are growing themselves.”
For more information on the microloan program, click here.
Four Tips To Obtain Farm Funding
Whether you are trying to get a loan or a grant, Helen Husher, publications and public information coordinator with Northeast SARE (Sustainable, Agriculture, Research, & Education), and Jim Radintz, acting deputy administrator for the Farm Loan Programs, say the first order of business is to research the specifics of what you are interested in funding before filling out an application.
1. When applying for a grant, Husher says to make sure the funding source you are working with matches what you want to do. In other words, don’t apply for a grant if it is not in line with your operation’s needs.
2. Prior to seeking funding, make sure you have the proper training and experience for what you are interested in doing, says Radintz.
3. Be realistic about your budget, and keep in mind that the funding source is on your side and wants you to succeed, Husher explains.
4. Have a mentor or an advisor you can reach out to, Radintz adds. “Part of our mission is to provide technical assistance to the extent we can, but this kind of production is quite complex. Having a mentor you can bounce ideas off can be invaluable.”