FCS Diversity and Inclusion - PROPOSED RULE - MARCH 2011
Dear Mr. Van Meter, A new crop of agricultural borrowers is in need of Farm Credit Systems financing and services. Each FCS institution should, as the proposed rule would require, develop a comprehensive marketing plan for serving the nation's growing diversity of food producers and their changing markets.
As with any solid marketing plan, FCS institutions should include market research, such as developing a baseline analysis of producers in their regions who meet the Farm Bill definition of local and regional food producers. This group is a primary component of the new crop of borrower FCS must serve better. The baseline should include details about these producers, both those in the FCS portfolio and not yet served by FCS.
Any good marketing plan also has a goal. FCS institutions should plan to invest no less than 10 percent of their capital within five years in this emerging crop of young, beginning, and small (YBS) farmers serving local and regional markets.
Good marketing plans also examine existing and needed resources and products. Based on market research and a new 10% goal for local/regional market producers, FCS institutions should adjust staffing resources and modify their financial products to fit this borrower's realities.
Part of doing this will require product research, development and testing. FCS institutions could consider setting aside limited pools of funds to try out reasonable deals and learn more about this new crop of borrowers and their evolving business models. Accepting somewhat higher risk or setting a higher loan loss reserve for these trial pools would allow the institutions to explore this market while still adhering to and balancing the 5 Cs of credit (character, conditions, collateral, cash flow, capacity).
Another part of this learning and FCS capacity building is to invest in staff and organizational time networking and engaging with a broad spectrum of businesses and organizations involved in developing local and regional food systems. Whether technical assistance providers or advocacy organizations, there are many in any FCS region to work with. Such networking can lead to productive partnering also, with some of these other organizations (CDFIs, social investors) bringing capital and expertise to the table also.
I appreciate the opportunity to comment on this proposed rule and look forward to working with FCS institutions as they take steps to fulfill the spirit and letter of this effort.
Patty Cantrell Regional Food Solutions LLC
Patty Cantrell PO Box 194 7165 Highland Dr. Beulah, MI 49617