A partnership to support diverse, beginning farmers access more money
A project funded in fall 2020, led by Food Finance Institute (FFI), is on a mission to lower the risk of beginning farm investments to make them more attractive to funders. The project is funded through a $387,000, three-year Beginning Farmer Rancher Development Program grant from the U.S. Department of Agriculture.
FFI will work with funders, investors and beginning farmers to create and provide a financial technical assistance (TA) program that will provide beginning farmers financial training and coaching to fix their business models, package a financial request, raise money and understand the financial benchmarks necessary to maintain profitability.
Project collaborators Iroquois Valley Farmland Real Estate Investment Trust (REIT) of Evanston, Black Oaks Center of Chicago, the Farm Credit Council and Compeer Financial will coordinate technical assistance and track performance of 45 farmers over time, with the goal of creating a program that can be replicated across agriculture lending institutions to bring in more capital for beginning farmers and ranchers.
“I have seen the positive impact FFI’s technical assistance has on the financial viability of farms that are receiving or seeking funding from private investment funds like Iroquois Valley and lenders like Farm Credit and Compeer,” FFI Director Tera Johnson said. “This grant will allow our organizations to extend these impacts to more farmers and create a replicable program that can work for even more farmers in the future.”
The work will focus on two groups of beginning farmers. First, beginning farmers in Iroquois Valley Farmland REIT’s existing and future loan portfolio. Iroquois Valley currently has 13 beginning farmers in their portfolio and will seek to more than double that over the course of this grant. To date, Iroquois Valley have invested in over 80 farms across 15 states, impacting over 13,400 acres.
Second, those from Black Oak Center’s (BOC) farm incubator program. BOC is located in Pembroke Township, Ill., and represents a historically black farm community. Through their incubator program BOC seeks to train a new generation of beginning farmers in an ecologically sustainable way.
The implications of this project could be substantial. Beginning farmers and socially disadvantaged farmers are both considered higher risk credits by lenders and investors. Demonstrating a lower financial risk in the presence of high quality comprehensive technical assistance could create a pathway for more capital to become available.
This post has been adapted from a press release issued by Food Finance Institute.