By Rachel Cernansky
Published: Grist, July 30, 2012

Farmers at McVean Farm Start Up Farm in Brampton

Nelida Martinez worked as a farm laborer for big conventional farms in California for almost 20 years. But after her son, Danny, was diagnosed with leukemia, she says, “I never wanted to work around chemicals again.”

Martinez started selling vegetables from her community garden to help pay for her son’s treatment (he has since recovered), and then got hooked up with Viva Farms, a farm incubator program in Washington state’s Skagit Valley that helped her access land she could farm as if it were her own. Now, Martinez has a three-acre plot there, leases another two acres elsewhere, and sells more than 70 types of organic vegetables at a farmers market, where she also makes fresh tortillas and sells Oaxacan-style tacos.

Martinez wants to expand her business, but access to credit or capital isn’t easy to get if you’re not established. That’s exactly why she was chosen to participate in a new microloan program designed to help small and beginning farmers. Martinez is one of the first two bootstrappers to receive funding from the Farmer Reserve Fund, a project launched jointly by Viva Farms, Slow Money NW, and a local credit union. She has received $2,000 to use primarily for buying seeds and vegetable boxes. “The loan allows me to have more cash throughout the season while I wait to harvest my crops,” she says.

This program is an early example of something that could catch on around the country and make a difference not only for participating farmers and their families, but also for our nation’s food system. In the recent past, microloans have often been used to help start or expand businesses in developing countries, but the concept is now taking off in the U.S. The U.S. Department of Agriculture even proposed a microloan program for small farmers this spring. Between that, the Farmer Reserve Fund, and other programs that have sprouted up like it, this could be the next step for microloans, and a promising future for beginning farmers in the U.S.

Once a farm gets to be a certain size, farmers have a relatively easy time accessing credit. “There are more government programs and [grants] for you once you’re on a more solid footing,” says Ethan Schaffer, Viva Farms’ director of business and organizational development. And, even when they’re just starting out, hipster farmers tend to have access to family loans and low-interest credit cards. But many young farmers — particularly Latino farmers — don’t have those options. So, says Japhet Koteen, the Farmer Reserve Fund’s project manager, they usually resort to high-interest credit. “Then they’re trying to run a business with a 20 percent interest credit card,” he says, which is not the best idea.

That’s why Viva Farms screens and selects Farmer Reserve Fund applicants, Koteen explains. They know the local farming community best and can help farmers access loans based on more than just their credit history.

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