The Importance of Being Earnest
I’ve debated how much of this story to share, the fine line between “too much” and “just enough” information in the blogosphere gets smudged, sometimes. So does the line between providing helpful information and just straight up complaining. Probably this is a little of both. Here goes (imagine a throat-clearing sound):
Last summer I attended a series of workshops through the local Ag Extension office. It was called Farm School for “beginning” farmers and intended to provide attendees with a whole toolkit of resources that covered the spectrum of issues new farmers face from crop planning to marketing to financing. I was in love, because that’s how I approach things: truly, madly, deeply. Early in the course series we met with a panel of potential funders that work specifically with large and small-scale ag producers. The farm credit agency that financed our original land and that subsequently swept in and saved the day in the 11th hour of our terrible-awful-no-good-very-bad home construction process showed up as a panelist. So did the federal Farm Service Agency (FSA), an arm of the USDA. Both provided information sheets at the table by the door listing their loan products, amortization terms, interest rates. My eyes fogged up with joy, and I nearly wept when reading over the terms available through FSA. Here, finally, was an option that might make so many of our wild and ridiculous dreams feasible. Real estate loans with terms we could shoulder, equipment and construction terms that made the dairy operation so reachable I finally allowed myself to consider its spot in my future. The FSA motto? “The lender of first opportunities,” and the agency rep spoke eloquently about FSA’s renewed focus on supporting new and small farmers. You are the future of this country, was the message a room full of wide-eyed dreamers received that day. This was exactly one year ago. July 2013. The chronology is important.
Step 1 for involvement in a FSA loan involved meeting with a loan officer to discuss my plans and determine if we may be a fit. The meeting was fantastic, and I felt incredibly supported, encouraged, and motivated to move forward to the more treacherous exercise of Step 2. In order to eventually even submit an application, we were asked to develop three sets of business plans: 1) The Pie-in-the-Sky/Dream scenario, 2) the Middle Road scenario, 3) the Start With Exactly What You Have Now scenario. This took considerable work, market research, conversations with mentors, reading, scheming. Jeremy developed a shmancy spreadsheet with formulas to spit out various milk volume to cheese production ratios. Armed with these three sets of plans, we met with the loan officer once more who confirmed that we were clearly ready to actually complete an application. “Pick one of these scenarios and use it as the basis for your application,” she suggested. We pointed at the Middle Road, grabbed the 1/2″ thick paper application. We got to work. Our first meeting with FSA was in Sept, and we signed, sealed, and delivered the final application just after Thanksgiving: November 2013.
In the midst of all that – and to be fair – the furlough occurred, shutting down any work at all federal offices, including FSA. I received notice in January that my application was received. After several conversations with staff, I received notice in early February that my application was considered complete. Then I received a letter in the mail (since nothing nothing nothing at FSA is electronic) stating that, since my application was complete, a loan approval decision would be made within 30 days. However, over the phone I was told that a major staffing issue at the local FSA office meant there was an enormous backlog of applications. Mine would be processed “in the order it was received” but it would not be within 30 days. So Jeremy and I took a long and steady breath. We made the foolish assumption – this being February – that SURELY a loan decision would be made by late March. That the loan would SURELY close sometime in April. Based on those assumptions we continued our planning regarding land, builders, equipment, the loss of my job, the potential for income generated from this business AT LEAST by the end of 2014. We had, after all, submitted the application in 2013. The chronology is important.
Then we waited. And then we waited some more. My application was not picked up for review until April 15, 2014. Thus began an almost daily process of hours worth of conversations regarding our business plan, the cheese making process, the size of my herds, the type of grass in our pasture, the brand of feed they are fed (no, really). Information about restrictive loan terms we had never previously been told about was suddenly communicated. A two hour farm visit from staff armed with a camera to photograph everything. Multiple emails. Finally we received loan approval mid-May. We were approved just two weeks before my job ended, the one I carefully planned around by submitting a loan application in November 2013 to use as a basis to launch my new career. The next step in the loan process? An appraisal. For the appraisal – we waited. And then we waited some more. After threatening to withdraw our loan application, an appraiser was finally assigned to our loan in late June. The day that he arrived, nearly two weeks after being assigned and after 6 weeks of waiting for his assignment, he and I both learned that FSA has not given him correct information about his scope of work. Two days later I terminated our application with FSA, and we have moved forward with the farm credit agency that financed the original farm and house. The terms are not as attractive, but they get the process done. And after nearly a year of waiting, communicating, processing, explaining, pacing, calling, emailing… – time is money, y’all. We will pay the higher price for efficiency.
Why am I sharing this with you?
That is a fantastic question, and here’s why. Over the course of the past year I’ve been fortunate to connect with countless homesteaders and small, young, or new farmers across the country. The primary question many of us ask is HOW? How do I get from here to there without gambling every last penny, using each asset as collateral, risking everything I have built? FSA seemed to answer that question with its initial guidance and support and eventual promise of sensible financing options that allowed a farmer to find their footing without being strapped with outrageous interest rates and monthly payments. It seemed custom designed for the community of like-minded folks I’m immersed in now. But, in my experience, working with FSA proved to be an enormous liability. During one of the countless calls in which clumps of my hair fell off my head, in which I chewed holes through my lips and dug nails in my palms ’til they bled – a FSA staff member said to me that although FSA calls itself the lender of first opportunities, the reality is that it is “the lender of last resort.” A surprising confession that I wish had been revealed back in September at my first meeting. Hell, I wish they’d laid their cards on the table during Farm School. My interpretation of the experience is this: if you have absolutely no other options, if you are dangling from the end of a fraying rope and your final, flickering hope is FSA then – by all means – send in an application and prepare to wait. And to wait.
The impact of this experience is visceral. I underwent an enormous amount of stress and anxiety having made financial plans around this loan over the course of nearly a year. Furthermore, I physically still have no infrastructure for my business, something we planned carefully to have constructed already. My initial motivation, excitement, drive, and energy for the project slowly waned and then puttered out to what is now a dim flame of optimism. And this isn’t our first rodeo, so expectations were already low since the loan and building process on our rural property in the midst of the Great Recession was treacherous, to put it lightly. I felt hardened and prepared to battle through this one. Except, based on the initial marketing and conversations with FSA, I never anticipated a battle – nor should I have. The singular positive aspect of the experience was the exercise of completing three sets of business plans. For that process and those products – I am grateful. Unfortunately they have collected dust over the course of the many months we’ve waited.
Jeremy and I are extraordinarily fortunate that we are able to access commercial credit to move forward with our plans. Many small farmers may not easily have this option. Without considerable savings and at least one off-farm job, this is – in a word – impossible (for us). My feelings on the subject of small American farmers could fill a book, my devotion to this career borders on religious. I believe the FSA process is different from state-to-state and that there are hopefully many stories to counter mine. I want to believe that. I want to believe that the USDA truly has carved out and protects a niche for the endangered small American farmer who humbly digs a piece of earth and offers up food for his/her local community. It is not glamorous work, but it is the real, honest, good work of creating food. Had our farm depended on the federal financial assistance that the loan process promised, we would have folded months ago. Yesterday I watched a video posted on the website of some of my favorite farmers, Blue Heron Farm , in which Lisa explains, “If you sat down and thought about it and ran numbers, nobody would start farming. You have to do it because you love it, you can’t ever do it for the money.”
I thought about that last night, curled up in a porch chair at midnight, listened to the bull frogs call and compete for mates, the gentle munching of cows around the hay bale, the low bleating of goats as they lay in a pile chewing cud. We are back on a path that we believe is feasible and can make this farm a legit piece of the local food community. Not because it will make us wealthy, but because we love it – and that’s enough to make us rich. It is all I know now, it is why we keep pushing through the obstacles – it is a cautionary tale that I hope helps someone else driven to the dirt, like us.