Small farms struggle for startup funding

Lettuce grows at the Teltower Ruebchen organic vegetable farm on June 1, 2011 in Teltow, Germany. Organic food from there will now be allowed to be sold in the U.S.

In lush Escondido, California, Karen Archipley started an organic vegetable farm with her husband about six years ago.

 “We're looking at rainbow chard, and luciano kale...we harvest this every Saturday for Sundays farmers markets, and now we're selling more to the stores as well,” says Archipley.

 The whole farm is just three acres, but it provides well for the Archipleys, plus a few employees.

 “You can take the size of a parking lot, and make a very good living,” says Archipley, who also tells me about a nearby farm called Amber Waves Organics, run by Ray Shields.

 Shields is retired Navy.

 “This is the lifestyle that I want to pursue,” says Shields. “I want to have a sustainable, organic farm of such a size that I can provide employment opportunities for maybe eight, maybe ten veterans, if I can get them to come there.”

 But traditional farm loans aren't designed for his vision, says Elizabeth Ü, the author of the forthcoming book Finance for Food.

 “Financing either goes to very large scale industrial farmers, or primarily to farmers of commodity crops that aren't even intended for human consumption,” says Ü.

 The big banks that loan to big farms aren't interested in a half-acre of eggplant. And startup farmers like Shields look too risky for most small business loans.

 “A lot of beginning farmers go into credit card debt, because that is the one form of capital available to them,” Ü explains.  

 A new microloan program from the USDA aims to fill this gap. Small, beginning farmers can get up to $35,000, at about one percent interest.

 “I'm seeking to reach out to customers that may have never walked through our doors before,” says Val Dolcini, who heads the California Farm Service Agency, who adds that applications are coming in fast: “A microgreens operation in Sonoma county, a sheep rancher in Solano County, a peach grower in Fresno.”

 In Escondido, Ray Shields has put in his application, to grow organic peppers. He should get about 30,000 dollars, just in time for planting season.

About the author

Eve Troeh is News Director at WWNO-FM in New Orleans, La., helping build the first public radio news department in the station’s 40-year history. She reported for the Marketplace Sustainability Desk from 2010 to 2013.

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