Colorado State University

Fort Collins, Colorado

Business Opportunities for Small Farmers

Dwight Carmon, Director, Processing Division, U.S.D.A.-Rural Development

• The small farmer, many times, must rely on another job or business opportunity.

• Farm Bill - can get guaranteed loans to buy stock in Cooperative. Gets Co-op going. (Example: Peanuts, Aquaculture).

• In North Dakota for example, straw used to be burnt, now particle board is made out of it.

• The definition of Rural - 50,000 population - outside city.

• Loans available for Agricultural production - no more than 1 million dollars per person. Program must be integrated. (eg.-use whole eggs including the shell).

• Loans can be for any Agricultural business venture - Example: new farm products, equipment.

• Rural Development Office all over the U.S. (Formerly Farmers Home Administration).

• Money available has gone from $100 million to $700 million over the past few years.

• Collateral- not as important as ability to do good business.

• Mr. Carmon's phone number: 202-690-4100.

Valued Added Opportunities for Farmers

Alan Ware - Kerr Center for Sustainable Agriculture, Poteau, Oklahoma

• The farmer gets .22 cents for every dollar.

• Increase amount going to farmer.

• Incentives of Value Added

• Higher economic returns
• Longer product shelf life (Example: jams and jellies)
• Profitable use of culled materials
• Extending the season
• (pickled products)
• Access to niche markets
• Easier handling for mid and end user
• More convenience for users (Example: pre-made salad)

Ways of Adding Value -Packaging

- Drying

-Canning

-Handcrafts

- Juicing

Financing Opportunities for Farm Ownership, Youth Projects and Farm Operating Loans

James Radintz, USDA-Farm Service Agency

• Direct loans including advise to farmers from FSA.

• Farm Assessment Program - FSA sits down with farmer to develop business plan depending on goals for the farmer.

• Loan Guarantee Program - Private leader makes loans.

• In 1997, $400 million for operating funds.

• $30 million for real estate loans.

• 25% of the funds go to beginning farmers for direct loans.

• Farm Bill - If one-half funding comes from another lender - the FSA can loan the rest at a fixed rate of 4%.

• Farm Bill:

FSA cannot finance non-farm enterprises. Cannot use real estate loan funds to re-finance debts. Unified Certification rather than several forms - one form

• Youth Project Loans (FSA)

$5,000. Under 21 years of age - over 10 years. Live in rural area. Youth can borrow money.

Purpose - 4H Project or FFA. Example: Lawnmowers, steers, machinery.

No need for parent to co-sign. Loan term is up to 7 years. Interest is 2-3% lower than bank rate.

Opportunities for Exports

Bill Westman, USDA-Foreign Agricultural Service

• The purpose of the FAS is to help develop new markets

• Promotes United States products overseas

• In 1996 - exports expected at $60 billion.

• People overseas want export

• products from the United States.

• Markets are growing rapidly overseas

• United States- advantageous in food production.

• Agricultural Exports increased $17 billion in the last 2 years.

• In 1975, Value added = 10% (overseas)

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