WHAT IS A COMMUNITY DEVELOPMENT FINANCIAL INSTITUTION?
As a CDFI, FarmLink is a financial institution with community development as its primary objective. In order to maintain its status as a CDFI, FarmLink demonstrates that it primarily serves low-income individuals and is accountability to the needs of beginning and historically disadvantaged farmers, including women and farmers of color. Another hallmark of CDFIs is that lending is accompanied by individualized technical assistance, such as helping farmers prepare and maintain financial statements which are critical for recordkeeping and demonstrating progress.
There are growing numbers of CDFIs investing in food systems and food access work in underserved communities, but California FarmLink is one of a handful nationwide focused on production agriculture, and among even fewer that specialize in sustainable agriculture and beginning farmers.
FARMER PROFILE: Octavio Garcia, Garcia Brothers Farm
The Garcia Brothers Farm near Salinas produces a variety of certified organic vegetables, including kale, chard, tomatoes and strawberries. The farm began in 2009 when Octavio Garcia invited his younger brother to join him in starting a farm. When Octavio was only 16 years old their mother signed their first land lease at ALBA. Given his age and limited business record, Octavio knew he needed a lender who could be flexible and offer technical support. After his first couple of years, FarmLink provided operating capital starting at $10,000 and helped the Garcia Brothers build a strong repayment history. Octavio received assistance from FarmLink in preparing cash flow projections and loan applications and, eventually, in finding land and negotiating a secure land lease.
Today, Octavio and Francisco operate a resilient business that maintains 11 jobs and operates on 15 acres. The Garcia brothers join the many Latino farm owner-operators who are the fastest-growing demographic in California agriculture. FarmLink is working alongside many of them to mitigate risk and build long-term stability and wealth with the effective use of loan capital. In addition, FarmLink provides farmers with business technical assistance as an integral part of our ongoing lending relationships, and our partner, Kitchen Table Advisors, provides in-depth business development assistance to some borrowers, including Garcia Brothers Farm.
Kaley Grimland and Edgar Mendoza, Sol Seeker Farm
Sol Seeker Farm is the brainchild of Kaley Grimland and Edgar Mendoza. Both have had training and professional experience in farm advising; Kaley at ALBA near Salinas, and Edgar in his native Paraguay. Their farm start-up in early 2014 was the result of a farm business succession opportunity that came to FarmLink from Hain Ranch Organics in San Benito County. It is a certified organic pastured poultry operation in stacked use within a walnut orchard; where the trees provide shade for the poultry, the poultry provide fertilizer for the trees, and the orchard’s ground provides varied food sources for the birds. Sol Seeker Farm produces both eggs and broilers for meat. One vital resource in the farm business succession was continued access to the farmers’ markets historically served by the farm.
Kaley and Edgar had a slow start in 2014, but certainly not in life, as they had twins while also starting the farm. Clearly they had their hands full, yet they doubled their gross income in 2015 and then increased it another 64% in 2016. Despite their rapid growth, they learned early on that expanding into more farmers’ markets did not necessarily justify increased production of broilers. Unfortunately they overproduced chickens, resulting in high operating costs, but came to understand that they could have addressed the issue by diversifying market channels to include local retail or wholesale accounts. With a FarmLink operating loan starting in 2015, they were able to purchase chicken feed and other supplies in bulk, and enjoy significant cost savings they would not have without the financing.