The Farm Credit Council, the trade organization for the farmer-owned Farm Credit System, was recently awarded a grant by the Risk Management Agency to produce written and web-based material using case studies to explain how local food systems work in the real world of business and economics, called the “Field Guide to the New American Foodshed.” With this field guide, beginning farmers, ranchers and entrepreneurs will be able to identify different food system business models as they come across them, along with detailed explanations of their business structures and related resources.
Most farm business advisors that are readily available are often very familiar with traditional commodity agriculture. But many beginning farmers and ranchers (BFRs) are serving markets that are often found outside of national and international commodity markets. In addition, many BFR operations are often located near metropolitan areas where there are fewer financial service providers familiar with the workings of an agricultural operation.
This leads to a situation where few BFRs know how to explain their business model to their would-be business advisors or lenders. Those business advisors may not know about the existing infrastructure of business support for agriculture, such as through Farm Service Agency Loan Programs. The Field Guide will be a resource for BFRs and their advisors to create business plans appropriate for the scale, capacity, and location of the new farm or ranch enterprise.
The Field Guide will start with existing case studies of farm operations demonstrating strong local and niche markets, and proven track records of successful BFRs. The case studies will illustrate the interdependence BFRs have with input suppliers, processers, distributors, and associations, educators, and business advisors. Footnotes and hyperlinks will take readers to detailed legal and accounting descriptions of the types of business entities (sole proprietorships, partnership, S-Corporation, LLC, etc.) that are typically used for the types of business functions described, and map the relationships between business functions, legal entity types, the availability of technical and financial assistance, and USDA programs (particularly crop insurance and programs identified as supporting producers focused on local and regional markets).
Farm Credit is the lead organization in developing the Field Guide. Partner organizations include The Ecological Farming Association (California), The Corporation of Newe Sogobia (Western Shoshone, Nevada), Midwest Organic and Sustainable Education Service (Wisconsin), Rural Advancement Foundation International (North Carolina), and The Greenhorns (New England). These partners from around the country are experienced in serving different markets, and Farm Credit is experienced in lending to the start-up businesses of young, beginning, and small farmers. Look for the Field Guide to be completed in 2011.