FarmStart, an innovative Northeast program to help individuals get started in agriculture, invested in 44 beginning farmer and fishing businesses last year. That’s a record, according to Lynn Weaver, FarmStart program manager.
More importantly, it feeds the growing interest of young entrepreneurs to get started in farming, fishing and related industries. Since the program’s inception, Farm Credit East, its founding partner, has committed more than $11.3 million dollars to 251 beginning farmers.
The first initiative of its kind in the U.S., FarmStart invests working capital of up to $75,000 to help new Northeast ag businesses become operational. It targets startup farmers and ag businesses with limited financial resources who aren’t generally eligible for conventional lending programs. It also invests in startup farmer-owned cooperatives and food hub enterprises.
The investment functions as an operating line of credit, and is intended to provide the critical last dollar of funding to overcome the financial challenges that true startup farming operations initially face in generating working capital, Weaver says. A FarmStart adviser works with each participant to help the new business stay on track toward achieving their business objectives. Repayment of these funds is up to five years.
Mushroom biz mushroomed
Incorporated in January of 2013, it took Michael Hallock and Robert DiPietro, co-owners of Rhode Island Mushroom Company, only two years to become the Northeast’s largest exotic mushroom grower. They quickly reached the capacity of their one greenhouse and needed capital to expand.
“But since we were only a year and a half into our business, we didn’t have the credit history for a traditional loan,” DiPietro says. So the fledgling West Kingston company turned to Farm Credit East and FarmStart.
With the FarmStart investment, Rhode Island Mushroom Company purchased additional greenhouses. They’ve tripled production and produce thousands of pounds of mushrooms each week. “Before we were selling mushrooms by the box. Now, we’re selling pallets of mushrooms wholesale,” Michael says. “Without FarmStart, our growth would have stalled for at least six months. They gave us money when no one else would.”
Farmers, forestry producers, fishermen, farm-related service businesses and cooperatives, generally in their first three years of business, qualify. A business plan is required for new business owners to demonstrate their ability to successfully use their FarmStart investment. CenterPoint, an ag-specific financial management computer software is provided to participants at no cost with the purchase of a Silver Level Customer Care Plan.
FarmStart, LLP was initiated by Farm Credit East and CoBank. Yankee Farm Credit joined the program in 2011. Click here to view the FarmStart report highlighting 10 FarmStart participants and the approaches many participants are using to garner success in the competitive agriculture industry.
Source: Farm Credit East