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A New Way of Doing Business for a New Generation

The experiences Lindsey and Ben Shute of Hearty Roots Farm in Clermont, NY helped the Farm Service Agency revise the Farm Storage Facility Loan to make the program more accessible for small and mid-sized farmers.

The experiences Lindsey and Ben Shute of Hearty Roots Farm in Clermont, NY helped the Farm Service Agency revise the Farm Storage Facility Loan to make the program more accessible for small and mid-sized farmers.

When Lindsey and Ben Shute contacted their local Farm Service Agency (FSA) office looking for loan assistance to build a new cold storage facility for their farm, they had no idea what was in store for them.

For several years, FSA’s Farm Storage Facility Loan (FSFL) program had been available for cold storage facilities like the one Lindsey and Ben hoped to build. But Mike Schmidt, Deputy Administrator for Farm Programs in the Farm Service Agency, had been hearing reports that it was not being used widely by diversified fruit and vegetable producers.  Unclear on why, he reached out to a number of members of the community-supported agriculture (CSA) field and other diverse fruit and vegetable producers to see what the hurdles were.  That’s when Mike got connected to Lindsey and Ben.

The couple runs Hearty Roots Community Farm, a midscale diversified vegetable farm in New York. Lindsey is also the Executive Director of the National Young Farmers Coalition, which represents many CSA and organic producers across the country and part of the National Sustainable Agriculture Coalition. They were looking to finance a new building for cold storage, washing and packing, in order to properly prepare and store their products for sale.

Mike asked to track Lindsey and Ben’s application process – getting feedback along the way from the producers and the Farm Service Agency employees working the case.  Together, they explored the challenges, hurdles, and opportunities that the program offered for diversified farmers.

What they learned through the process is that there were several hurdles to producers like Ben and Lindsey that did not exist for other types of producers. For example, the process to determine the storage need and size the facility using acreage reports and crop yields, works effectively if producers are storing a single commodity, but would mean a mountain of paperwork for Ben and Lindsey’s more than 30 crops spread over just a few acres. Similarly, to qualify for a farm storage facility loan, Lindsey and Ben had to have coverage under FSA’s Non-Insured Crop Disaster Assistance Program (NAP) or a crop insurance program – but these programs currently do not provide meaningful protection for their direct-to-consumer business model and meant added cost with little benefit.

Through waivers, the Farm Service Agency was able to grant Ben and Lindsey their loan – and then set to work to incorporate the lessons learned throughout the whole program.

Fast forward to today. As a result of this collaboration, diversified and smaller fruit and vegetable producers, including CSAs, can use an alternative method designed for them to determine storage needs or seek a waiver from the requirement that they carry crop insurance or NAP coverage when they apply for a FSFL loan if no appropriate products are available to them.  And now, FSFL can be used to finance the equipment necessary to handle produce before it reaches cold storage, such as sorting bins and wash stations.

This is exactly how the USDA of the future does business.  The next generation of farmers and ranchers doesn’t need the same things that the last generation did when they walked through the doors of the Farm Service Agency.  This new generation needs a USDA that is more responsive and adaptable to the types of agriculture that they are engaging in – from the smallest community farming arrangements to the largest, most technologically innovative farm businesses.

USDA is committed to providing the resources and tools that help tomorrow’s farmers and ranchers succeed today. Learn more about what’s available to help small and mid-sized farmers, including information about access to capital, risk management, food safety, and locating market opportunities, at USDA’s Small and Mid-Sized Farmer Resources website.

2 Responses to “A New Way of Doing Business for a New Generation”

  1. Ann says:

    This is wonderful! I’m a small scale farmer, and I was very concerned about some of the legislation being discussed last summer. Much better!!

  2. Paul says:

    Loans are great and all, but these facilities are basically necessitated by a government mandate. I would like to see EQIP expanded to include small scale packing facilities and the infrastructure they require (three phase power and wastewater disposal), which are at least as much in the public interest as high tunnels. We’re talking about tens of thousands of dollars of new debt for each small operation.

    There will be no premium for FSMA-compliant produce, and so no additional profit to service this debt. Small farms are already generally saddled with large debts as it is. Taking on even more to comply with regulations is not financially viable.

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