By Catherine Howard, Northern California Community Loan Fund
Despite being nestled amid the country’s most lucrative agricultural sector, California’s Central Valley and Central Coast experience high rates of poverty, unemployment, and homelessness. This area, one of the country’s richest, generating nearly $5.3 billion in revenue from agriculture, paradoxically contains some of its poorest counties.
Over the last 10 years, as interest in healthy and local food has grown, a new sector of enterprise and new modes have emerged to build economically strong, vibrant communities. The Northern California Community Loan Fund (NCCLF) serves the Central Valley and Central Coast region. As NCCLF began learning more about the unique needs of the area, we saw the opportunity to use our experience as a financial services provider to support the goals of community-based healthy food production, distribution, and access, alongside increased economic development in the region. We explored options for food and agriculture lending, analyzing market needs, demand, and partnership opportunities — all with the goal of developing a food and agricultural lending strategy that will spur economic activity, help businesses grow, increase employment, and promote community development in some of California’s most vulnerable communities.
The key lesson we learned: partnerships and collaboration are critical to gain experience, learn about the sector and industry, increase our impact, and support community-based economic development.
In 2014, we established three important partnerships: NCCLF joined The Reinvestment Fund’s (TRF) ReFresh program, which seeks to increase healthy food access throughout the country; partnered with Citibank on an emergent food enterprise initiative; and began working with California FarmLink, a well-known community development financial institution (CDFI) that provides access to capital and land to low-income, minority and small-scale farmers in California.
California FarmLink helps farmers learn and improve business and financial management skills, find land, and obtain financing. This past February, we made our first partnership loan with FarmLink to Bucio Organic Farms in Salinas. Founded in 2007 by Rigoberto Bucio, a Mexican immigrant, and his extended family, the farm sits on about 15 acres, grows organic, healthy food and delivers to market — mostly consisting of regional wholesale distributors. Together, NCCLF and FarmLink are providing Rigoberto an $80,000 loan to finance the farm’s “pre-season” costs; working capital to buy seeds; as well as preparing and planting organic strawberries and a variety of vegetables. This is Rigoberto’s fourth loan from California FarmLink since 2010. With this financial support and expanded acreage, he has grown his farm’s income by 300 percent. For this coming year, Rigoberto is focused on diversifying his crop mix, which will present less risk to his income.
"As my farm business has grown, financing has become increasingly important. Strawberries, one of the primary crops that I grow, requires quite a bit of capital up front to plant and care for before I can harvest and generate revenue,” said Rigoberto. “Without the financing I have been able to access, I would not be able to operate my business at the scale I do. In addition to the financing, the business resources and advice that FarmLink provides me has been essential to my success.”
Receiving long-time support from the Agriculture and Land-Based Training Association (ALBA), Kitchen Table Advisors, FarmLink, and now NCCLF, Rigoberto has been able to increase his own financial security, local access to healthy and organic foods, and inspire growth and learning in the process. Despite many barriers to success, examples like Rigoberto has proven that resilience, dedication, and community partnership are essential to triumph.
NCCLF’s partnership with TRF through their ReFresh program has provided us with the capital necessary to increase our equity base to take on a new type of lending and consider loans with risk profiles very different from our traditional real estate and nonprofit working capital portfolio. Collaborating with California FarmLink has resulted in a process full of learning, partnership, and an opportunity to share risk.
We’re proud to be doing this work in collaboration — learning, growing, and utilizing our experience to leverage increased food security and impact.
Catherine Howard serves as the Director of Strategic Initiatives at Northern California Community Loan Fund.
*The views and opinions expressed in this article are those of the author and do not necessarily reflect the position of The Healthy Food Access Portal.