NETNEWS
May 1999

$ Finding Small Farm Friendly Banks

Limiting the amount of debt a beginner needs to start a farming operation is an integral part of the work of farm and ranch linking programs. When financing is needed, finding a lending institution that is not only convenient but understanding to the needs of small and beginning farmers can be a challenge. The Small Business Administration Office of Advocacy released in late February a report that ranks the "small farm friendliness" of banks within states and provides an overview of small farm lending across the nation.

The information is conveyed to help identify banks most likely to meet the credit needs of small farmers. Read more about this study on the web at http://www.sba.gov/ADVO/lendinginus2.html. or http://www.sbaonline.sba.gov/advo/

 ü Welcome One and All Interested in Fostering a New Generation of Farmers and Ranchers

Beginning Sunday, June 13, 1999, in Ithaca, New York, experts from around the country will gather to present and share their wisdom on transferring farms and ranches to a new generation on into the next millenium. Anyone who has an interest in supporting the next generation of farms and ranches will be able to gain insight on how to develop an economic development program that will impact their rural communities. Make plans to join them during the annual meeting of the National Farm Transition Network now by contacting Cathleen Martin Shiels at 607-255-4121, NY FarmLink, 415 Warren Hall, Cornell University, Ithaca, NY 14853 for more information and registration materials. Registration is $99 per person until May 21 and $125 per person for late registrations.

1:00pm Registration
2:00pm Welcome & Agenda Review - Introduction to the National Farm Transition Network
2:30pm Program & Resource Sharing
6:00pm BBQ Dinner and informal networking
7:00pm Program and resource sharing

8:00am Farm Transfer Research Conducted in New York State
10:30am Considering the family and personal needs of the farm transfer & partnership formation
1:00pm Developing an advising network
2:30pm Working with Your State's Economic Development Agency
3:30pm Farm Transfer Issues - Discussion with Steven Koenig, Senior Financial Economist USDA/ERS
4:30pm Reports:
USDA Small Farm Commission - Marion Bowlan
What's happening in NY related to small farms - George Conneman
National Small Farm Advisory Committee - Kathy Ruhf
7:00pm Discussion on FarmLink program funding opportunities

8:00am Evaluating your FarmLink program
10:30am Panel of Farm Linkages
12:30pm National Farm Transfer Network Discussion of Future Direction

 : Maryland Farm Link New and On Line

The State of Maryland now offers a free program that is ideal for anyone who is planning to transition out of farming and wants the land to remain productive. Maryland Farm Link, offered by the Maryland Department of Agriculture and Maryland Cooperative Extension, is a free program that matches beginning farmers to existing farmers who do not have heirs who will continue the family farm business. Since it began in November 1998, 17 aspiring farmers have enrolled in the program; five existing farmers have signed up.

Some of the "new farmer" enrollees are current or former farm managers who want to eventually own a place of their own. Almost all of the enrollees have some experience raising livestock, grain or produce. Several grew up on farms. A few have other skills that can be valuable to a farm operation, such as accounting or mechanics.

For example, one enrollee grew up on a farm and has also done construction work. He and his wife "consider farming to be a serious business commitment and feel that we have the intelligence, resourcefulness and determination to survive. We are only asking for the opportunity to farm."

Also looking for an opportunity is a self-described "hardworking couple in our late 30s. We have two great teens in 4-H, outstanding personal credit and farm knowledge." They live in Central Maryland, but are willing to locate to Western Maryland or the Eastern Shore to fulfill their dream of a career in farming. These are the type of folks attracted to Maryland Farm Link.

Of course, the program also benefits existing farmers, like the retired forester who wants to continue living on his tree farm while mentoring a new farmer. Or the one who wants to groom an operating partner for a produce business.

If you are an existing Maryland farmer, Farm Link makes it easier for you to help someone less experienced while perpetuating the lifestyle of family farming for the next generation. If you are a new farmer, the program provides a way to develop or improve your production skills by learning from an seasoned farmer and avoiding the high debt needed for start-up costs.

To enroll in Maryland Farm Link, farmers complete questionnaires about the size, location and operation of the farms they own or want to own. Blank questionnaires are available on the Farm Link web site and by mail. They are kept on file at MDA.

Very basic information is provided to the public: county, acreage and primary crops or livestock produced. Farmers' names, telephone numbers and specific addresses are NOT listed on the Internet nor given out over the telephone. Names and enrollment forms of possible matches are mailed to suitable enrollees, who decide whether or not to contact each other.

To learn more about Maryland Farm Link, visit the web site at http://www.mda.state.md.us/farmlink/farmlink.htm. Or call (410) 841-5770 and request an enrollment form.

 Montana FarmLink in Big Sky Country

The original purpose of the Montana FarmLink Program when it was started by AERO in 1996, was to hook up aspiring farmers and ranchers with landowners looking to retire yet keep their land in production. The program focused on land transfers, usually in the form of purchases, and was measured by the numbers of "links" achieved. The program initially attracted many new farmers yet only a few landowners joined.

With the average age of Montana's farmers and ranchers at 53 years old, the need for connecting this aging generation of producers to the next one still stared us in the face. In this article we would like to share how, over the past six months, we have doubled the number of landowners in the program (now 17) and increased beginning farmer participation by 43% (now 60) by including more public outreach and boosting our service to individual applicants.

Last summer when AERO's FarmLink team changed leadership, the new Sustainable Ag Program Manager, Marcy Mahr, and new FarmLink coordinator, Jonda Crosby, revisted the program’s goals and measures of success. They sat down with longtime AERO member, Vicki Lynne, and assessed the program's assets: 42 aspiring applicants and several landowners; a strong partnership with the Montana Department of Agriculture; an advisory pool of experts in legal, financial, and farm and ranch planning; a "toolbox" of resources related to land transfers; a detailed survey of Montana banks willing to make loans to beginning farmers; a small pot of money to assist applicants in paying for consult services; and a strong interest by AERO members in "smart growth" policies to keep land in agricultural production.

Then several 64,000-dollar questions arose simultaneously. How were other FarmLink programs attracting landowners? How could we give our applicants, both landowners and aspiring farmers and ranchers, the attention each would need to successfully meet their goals? What could we do to meet the ever-increasing demands on program staff? Was program success really about the number of "links"?

We decided that several actions to further develop our program could feasibly be put in place right away. The first step was to contact other FarmLink coordinators to find out how they manage the diversity of calls relating to legal, financial and purchase agreements. (Thanks to all of you who were so helpful in thinking through this step.) Another thing we noticed, and confirmed with other FarmLink program leaders, was that most of the work in FarmLink is really centered around defining goals. Changing our emphasis from land links to being a clearinghouse for land transfer information and education was an important decision. We now support applicants by providing examples of "real life," successes and materials developed by knowledgeable individuals and agencies associated with AERO and Montana FarmLink. We also contacted our resource pool of professional service providers to discuss how their role might become more active ones. Involvement by legal, financial and estate planning professionals was a key component of a one-day FarmLink workshop. These resource people continue to provide some terrific materials and council when needed.

Last fall the most creative and successful change we made was to contact applicants to see if they would be willing to "go public" with their farm and ranch aspirations and needs. Our idea to publicly profile applicants was designed to generate more direct and immediate contact between FarmLink applicants and retiring landowners.

We were delighted when we received a call from Clint Peck, the editor of the Montana Farmer-Stockman, after our first applicant profiles were sent out as a press release to selected Montana agricultural press. Peck asked, "Would we like to have a page in his magazine dedicated to FarmLink for the upcoming year?" Montana FarmLink profiles have now become a regular feature in this widely read agriculture publication. Peck edits the interviews down to 700-800 words and personally travels to the FarmLink family for photos for each article. We have been running pairs of applicant stories each month since last October. After the profiles appear in the Montana Farmer-Stockman we then release them to a dozen other community and agriculture newspapers. Several papers pick them up and print them verbatim, others re-interview the family if they’re within their local area.

Profiling the applicants has been a great boost to the Montana FarmLink program. We are able to highlight specific applicant needs regarding land, legal and financial requirements. Interspersed in the article are solutions and resources readers could contact or use to answer their questions too. An added bonus for working on the profiles has been the many letters of inquiry and thanks from folks all over Montana telling us their hopes and dreams to pass on land or find the right "spot".

 The decision to link or partner with someone is it not easy for either the beginning or retiring farmer. Beginners come with new ideas and an exuberance of energy as they embark on a new adventure. (Albeit many times proceeding with an ever so small amount of caution.) Retiring farmers tend to like the idea of a legacy as much or more than the concept of helping someone get a start. As facilitators, we play a role of looking at the financial capabilities, farm enterprise interests, business structure, tax implications, etc. of the transition.

Linkages can consist of a new partnership arrangement, the bringing a new farmer into an existing corporation, or a leasing arrangement of one sole proprietor to another. Consider suggesting to both generations the idea of putting together job descriptions that will outline their own and the other party’s roles, responsibilities, and duties. Each party should also identify what they see as their strengths and weakness. A comparison of the documents can serve as a communication piece to aid discussion of expectations of one another. The discussion to follow the sharing of expectations on both parties will provide a means of providing structure to the business arrangement and appreciation for both party’s contributions.

By identifying roles and expectations the lines of communication are opened and a clearer picture can be developed for all parties.