The Grow a Farmer Fund provides small-scale sustainable farmers low interest loans to help them improve their operations and increase their bottom lines.
WHY IS THIS FUND NEEDED?
While we all love the idea of small and mid-sized farms growing great food for our tables, the reality is that small-scale farming is hard work and it is challenging to make a decent living. On top of that, small-scale farmers are the folks that have the hardest time securing bank financing because they often lack collateral, are too small, or are trying something new (and thus are too risky for traditional lenders.) A handful of programs do provide small loans and grants to these type of farmers, and this program will complement those funds.
WHO IS BEHIND THIS?
The Grow a Farmer fund builds on years of work by many businesses and organizations (including natural food co-ops, farm-to-table restaurants, non-profit organizations, and farmers!) that are working to improve our food system and reshape the local food economy. These are people who care deeply about improving the food system, helping farmers, and preserving the land. The Grow a Farmer Fund is one step in the bigger vision that has been emerging – a vision where farmers who are committed to growing good food while being good stewards of our natural resources are able to make a respectable profit.
This initiative is one part providing accessible financing to small farms and one part giving good food citizens a means to invest in the kind of farms we want more of: those that contribute to a healthy food system and thriving local economy.
While a number of organizations and individuals have been involved in getting us this far – a core group began this work: Renewing the Countryside, the Southern Minnesota Initiative Foundation, the Sustainable Farming Association, Shared Capital Cooperative, Feast Local Food Network, and Regeneration Partnership. We continue to add additional partners such as Mill City Farmers’ Market, Impact Hub MSP, the Food Building, and Birchwood Cafe. We hope to be able to add your name to the list!
WHERE DID THE FUNDS COME FROM?
The funds for this program were donated by individuals and organizations during a campaign we launched in 2016. This donation-based fund is a step on the road to creating more pathways for good food citizens to invest in the kinds of farms and food systems that we want to see flourish. In the future, we expect to have investment options in addition to donation options.
With the Grow a Farmer Fund, we are supporting farmers and also learning more about the needs and challenges both to farmers and with this type of lending. This will serve as a proof of concept for broader Slow Money initiatives.
We are looking to people like you and me – who love good food and understand the financial challenges that small-scale sustainable farmers face – to support this fund. We are organizing to meet these challenges using a Slow Money approach to keep local money in the community and build a thriving local economy.
WHO MANAGES THE FUND?
The Southern Minnesota Initiative Foundation (SMIF), in partnership with Slow Money Minn. and Feast Local Food Network, houses the Grow a Farmer Fund. SMIF is a well respected and established community foundation that serves the twenty counties of southeast and south central Minnesota. SMIF has generously agreed to donate their time and expertise to manage this fund. SMIF manages a number of loan funds and has extensive experience working with small businesses. An advisory team, with expertise in small farms businesses, will work alongside SMIF staff to assist in reviewing applications and ensuring the process works for small farms.
WHO IS ELIGIBLE?
Small farms using sustainable practices who can demonstrate that a small loan can improve their operations and increase their bottom lines. In this phase of the project, we will focus on farms that are located in the FEAST Local Foods Region, which covers the 20-county service area of the fund administrator, the Southern Minnesota Initiative Foundation. These counties are: Blue Earth, Brown, Dodge, Faribault, Fillmore, Freeborn, Goodhue, Houston, Le Sueur, Martin, Mower, Nicollet, Olmsted, Rice, Sibley, Steele, Wabasha, Waseca, Watonwan and Winona. If all goes well, we’ll work to expand this initiative to other regions of the state.
HOW DOES THE LOAN PROGRAM WORK?
The Grow a Farmer Fund provides loans of up to $15,000 to small farms for projects that will improve their operations and increase their bottom line. The eligible projects are broad because every farm business is different. Examples might include building a winter greenhouse to extend the growing season, automating systems that increase efficiency (think watering systems for veggies or livestock), or covering start-up costs for perennial crops that are great for the environment, but don’t start paying back for a few years.
The process is straightforward and transparent. Farmers will fill out a user-friendly application form, provide references, and provide financial paperwork. A lending committee comprised of SMIF lending staff and small farm advisors will review the applications based on the borrower’s ability to repay the loan. The review committee will also look beyond collateral and credit scores in making a determination. A key factor will be demonstrating a viable business plan with market opportunity. Repayment terms and loan interest will vary and will be determined by the discretion of the loan review committee.
As these farms grow, the fund recipients will repay their loans. That money will then go back into the loan fund and be available for other farmers. This way the money will continue to circulate in the community providing enduring support for small-scale sustainable farmers!