Federal credit effort seeds local agriculture



For the Capital Press

Oregonians know their food. Our state is a leader when it comes to supporting local food producers: Oregon is home to close to 170 farmers' markets, 20 of which stay open all winter long, and to several "food hubs," innovative businesses that aggregate the products of small and midsize farms and market them to larger buyers.

The website Local Harvest lists over 200 community supported-agriculture programs in Oregon, where customers pay a lump sum at the beginning of the season and receive deliveries of fresh produce throughout the year.

Local food may be in high demand here, but that doesn't mean that local food producers have an easy go of it. Among the biggest challenges they face is access to credit -- a fundamental building block of any successful farming operation, whether it's selling down the street or across the globe.

Here's the problem.

Each year, Oregon's farmers and ranchers must pay up front for the supplies they need to get plants in the ground or raise a new generation of livestock. Seeds, feed, equipment and other necessities must be purchased before the season starts, but revenue won't come until harvest time. Anything that can't be paid for with last year's profits must be acquired on credit.

Securing credit from a commercial lender can be a challenge for any farmer. It's especially challenging for new producers, who lack a long business history, and for farmers and ranchers with less conventional business models. That includes those selling to local stores, restaurants, and institutions or directly to consumers -- Oregon's local food producers. Traditional lenders aren't always willing to take the risk. But without credit, there will be no seeds going in the ground.

There is a major disconnect between consumers' booming interest in local foods and the gap in commercial credit available to local food producers. That's where USDA's Farm Service Agency is trying to make a difference. When Cory Carman, a Stanford graduate from a ranching family in Eastern Oregon's Wallowa Valley, and her husband, David Flynn, visited their local FSA office in 2008, they presented a promising business plan to produce high-quality grass-fed beef for retailers and farmers' markets throughout Oregon.

FSA made the first of several operating loans to Carman Ranch that year. In 2011, Cory and David applied for and received an FSA farm ownership loan, allowing them to purchase land and a house of their own.

Today, with several years of strong performance under its belt, Carman Ranch is receiving credit from a commercial lender. This is how it should work: FSA helps the farm business build a strong foundation from which it can then leverage private support.

Supporting local food producers is a relatively new venture for FSA, and stories like Cory Carman's remind us how important our role is. When Agriculture Secretary Tom Vilsack launched USDA's Know Your Farmer, Know Your Food initiative in 2009, he called on the department to expand outreach to local food producers and businesses. FSA saw an opportunity to reach a new segment in agriculture and has been working to provide that service ever since.

Here in Oregon, FSA is exceptionally proud of contributing to the development and success of strong local food systems. We hope to do even more in the future. But we won't take all the credit: that goes to our state's farmers and ranchers.

Lynn Voigt is the state executive director of USDA's Farm Service Agency in Oregon. More information about FSA resources to support local food systems can be found in the Know Your Farmer, Know Your Food Compass, www.usda.gov/kyfcompass .

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