Guest Post: How to Finance Your Transition to Organic Farming
At the end of the day, all farms run on numbers. Input costs, grain prices, land values—finances are an unavoidable part of any operation.
Many growers look at organic farming as a possible income boost, thanks to the high premiums often seen in organic grain. But the financial aspect can also be one of the largest barriers to entry. The learning curve of new practices, combined with the 36-month transition period to get fields certified organic, can be daunting to the pocketbook.
Finding a good lender for your organic transition
That’s why it’s important to have a good lender who understands the challenges—not to mention potential for success—of going organic and can walk with you as you take your next steps.
So what are these lenders looking for? Here are few things to consider:
1. What is your plan?
It doesn’t have to be set in stone, but the key is to show an awareness of what it’s going to take to get through the transition period. Banks want to see that you see the risks, have a plan to work through any learning curve and are comfortable starting small.
2. How much equity do you have?
With recent low commodity prices, it’s tough to have enough cash laid away to make the transition stress-free. But if they’re going to lend you their money, banks need to see some built-up equity in the operation and/or your ground to leverage any losses.
3. Do you have a partnership?
Whether it’s with an organic consultant—such as AgriSecure—or your banker, lenders want to know that you are willing to ask the right people for help and are realistic about your operation’s potential for the project.
Get the support you need for your organic transition
Some ag lenders have created options specifically for farmers interested in transitioning to organics. They know what it takes to make an organic operation successful, and their goal isn’t just to get you through the transition but to help your farm succeed—and create a legacy for years to come.
If you need help creating a plan to transition to organic farming, contact AgriSecure today.