The Illinois Local Food Farms Jobs Council is developing plans for a comprehensive financial infrastructure to grow local food economies. The Council—a community-led coordinating body authorized by state law—finds that solving the food-system-funding challenge may mean reinventing the century-old Farm Credit System  (FCS).

FCS is a nationwide network of 85 customer-owned cooperatives. Created by Congress to serve all of agriculture, FCS is America’s largest agricultural lender, booking nearly $192 billion in loans and earning more than $4 billion in profits in 2012.

Its lenders take pride in being able to close loans in a matter of minutes for relatively low risk borrowers who are beneficiaries of federal subsidy programs. No wonder Farm Credit affiliates are well-known within agribusiness circles and an enigma in the local food marketplace. Read more

“I’m the only middle man I like,” farmer Bill Warner says of his preference for a direct marketing business model that’s become known as “retail agriculture.” The 53-year-old Warner and his wife Judy Hageman co-own Snug Haven Farm. Located in Wisconsin’s Dane County, they supply an acre’s worth of spinach, tomatoes, flowers and herbs to farmers’ markets, restaurants and a buyer’s club. More than half is sold to outlets in the nearby state capital of Madison. Most of the balance is delivered to customers three hours away in Chicago.

Warner sees growing demand for small farm products in grocery stores and institutional markets like schools, universities and hospitals. These high-volume wholesale channels require farmers to aggregate products for somebody else to deliver via semi-trailer truck. Snug Haven has an additional 25 acres of cropland that could be used to supply nearby wholesale markets. This year, this parcel produced hay sold to area farmers. Next year, Warner intends to raise rolled oats for human consumption and rent some ground to an organic dairy farmer.

Warner’s skepticism towards middle men extends to the financial-services arena. Read more

Warren Taylor is a 60-year-old, Ohio-born entrepreneur who used to work at Safeway’s Dairy Division Headquarters when the grocer was the world’s largest milk bottling company. In 2007, he and his wife Victoria decided to mortgage family-owned rural land to start a business to process and distribute products sourced from cows that graze the southeastern Ohio countryside. The plan was to capitalize on consumer demand for products raised through environmentally sustainable agricultural methods and bring jobs to one of Ohio’s poorest counties.

Five years later, Snowville Creamery has more than 30 employees and a million-dollar payroll. Its 2012 projection is for $5 million in sales to regional grocery stores and an ice cream company. In recent months, Snowville began turning a profit. In recent days, five more employees were hired.

Today, Warren Taylor plans to drive to the state capital. The U.S. Deputy Secretary of Agriculture Kathleen Merrigan is scheduled to keynote a Columbus forum entitled, “Ohio Grown: Local Food Creating Local Opportunities.” Taylor intends to advocate for the idea that dairy processors like Snowville can be the foundation for community-based agricultural economies nationwide. Read more

First Lady Michelle Obama’s campaign against childhood obesity moved forward last Wednesday with her announcement that grocery chains have agreed to open or expand 1,500 stores in urban and rural “food deserts” nationwide.  She did not say who would be growing all the anticipated fruits and vegetables.

Many believe local farmers and businesses could help supply these retail outlets, and grow new jobs in the process, if provided more business development support.  America’s largest farm finance network, the Farm Credit System (FCS), is considering a proposed regulatory rule that could help deploy such expertise. Read more