|MICRO-LOANS HELP CALIFORNIA'S SMALL FARMERS|
|, Jan 01, 2014
California's agriculture production tops the nation, yet many farmers, particularly beginning and minority farmers, struggle to access land and financing. Difficulties to obtain credit for many of these farmers are compounded by language and cultural barriers, limited collateral and credit history, and the fact that they often need very small loans. For the past 14 years California FarmLink, in Santa Cruz, Calif. has been working to help connect these producers with the resources they need – both land and capital - to grow their businesses and create jobs.
USDA Rural Development provided California FarmLink a $500,000 RMAP loan along with a $105,000 RMAP technical assistance grant in 2011. Loan funds were used to establish a revolving loan fund targeting the state's small farmers.
California FarmLink's revolving loan fund has provided 23 loans between 2011 and 2013 to small farmers in a six-county region. The average loan is just under $15,000 – much smaller than what traditional financial institutions would loan – and over half of these have supported women and minority farmers. These micro-loans, some as low as $5,000, have helped farmers purchase seeds, plants and equipment, employ workers, and market their crops and helped them become more profitable. For example, Riverhill Farm, a 19-acre organic fruit and vegetable farm in Nevada County has been able to expand their operations thanks in part to two loans from California FarmLink. An initial $15,000 loan allowed the owners to hire three new employees, and transition from selling exclusively through a community supported agriculture (CSA) model, to expanding to farmers' markets and a co-op grocery store. Riverhill Farm paid back their loan early, and recently received a new $25,000 loan for the working capital necessary to increase production in order to meet their new demand. This year the farm is projecting a 36% increase in sales.