The number of farmers' markets nationwide has grown dramatically
in the last decade, fueled in part by growing demand for fresh produce.
According to the 2002 National Farmers Market Directory, the number
of markets increased 79 percent from the 1994 total, to 3,100. 1/
In the Twin Cities, much of the produce sold at these markets is
grown by new immigrants who tend plots of land near urban centers.
For these immigrants, farming is a source of income, opportunity
and independence. However, a number of barriers can prevent new
immigrants from accessing land and credit for farming operations.
This article outlines some of the benefits and challenges related
to farming opportunities for new immigrants. It also examines three
programs serving new immigrant farmers in and around the Twin Cities
that help these agricultural entrepreneurs obtain the financing
and knowledge they need to run a successful farm.
Money and more
For many new immigrants who settle in urban areas, community gardens
provide their first agricultural opportunity in the U.S. According
to Corrie Zoll, program director of GreenSpace Partners, a community
gardening program administered through the Green Institute in Minneapolis,
there are approximately 100 community gardens in Minneapolis alone.
These spaces allow new immigrants to produce culturally specific
foods and adjust their growing methods to the soil and climate conditions
in the Midwest.
Growers who make the transition from community gardens to small-scale
farms can earn significant income from even a small plot of land.
Vang Yang, community program specialist with University of Minnesota
Extension's New Immigrant Farm Program (NIFP), estimates that vegetable
growers can earn approximately $4,500 a year per acre, depending
on factors such as weather and soil quality.
The benefits of farming go beyond money, according to Nigatu Tadesse,
a former extension educator and assistant professor who coordinated
the NIFP. "For new immigrants, farming is engraved in their
culture," he says, "and sometimes it is therapeutic."
As Tadesse explains, farming is a way of life for many families,
a link to culturally important foods that are not available in mainstream
grocery stores. Growing one's own food provides the opportunity
to be one's own boss, become an entrepreneur and gain greater independence.
Barriers to farming
Small-scale farming yields important benefits, but it can be a
difficult goal for new immigrants to achieve. The most fundamental
element of farming—land—is not easy to acquire. Renting land is
an option; however, most immigrants prefer ownership, because land
for rent is often difficult to find and renters have limited control
over land use. Land ownership is particularly important for farmers
who wish to grow organic produce, because the certification process
for organic foods requires documentation of any chemicals applied
to the land during the previous few years. Purchasing and financing
land is a major challenge for new immigrant farmers, because locating
affordable land for sale can prove daunting. Many farmers' markets,
such as St. Paul's, require that all produce be grown near the central
cities, but in the Twin Cities area, land near the central cities
is becoming increasingly scarce and commands a premium price.
Even if an affordable plot of land is found, new immigrants may
be unfamiliar with the real estate buying process or unaware of
the preparation, documentation and business planning that must be
performed prior to approaching a lender. Many new immigrants have
weak credit histories or no credit histories at all, due to limited
exposure to the U.S. credit market. Language barriers can inhibit
real estate and financing transactions, and insufficient down-payment
ability is another issue.
Lenders may also lack sufficient information on new immigrants'
farming businesses, which can weaken applicants' chances of obtaining
financing. A lack of familiarity with the products grown by immigrant
farmers means lenders must spend additional time researching crop
types, probable yields and overall market potential.
New immigrant farmers who succeed in purchasing land can face additional
challenges such as a lack of experience with new agricultural techniques.
For those who successfully grow crops, finding high-volume sales
opportunities can be a challenge. Many of the immigrants who sell
at large farmers' markets in the Twin Cities have had their stalls
for 10 years or more, limiting the number of open slots for new
Programs provide support
Some organizations are recognizing the barriers listed above and
offering programs to meet the unique needs of new immigrant farmers.
The three programs described below have been effective in providing
financing and other support for new immigrant farmers in the Twin
Cities area. The first has existed for some time, and the remaining
two were created recently.
Farm Service Agency
Charged with providing credit to new farmers and ranchers, the
United States Department of Agriculture (USDA) Farm Service Agency
(FSA) has been active in Minnesota's new immigrant farmer arena
for the past few years. The two loan products available from the
FSA include guarantees and direct loans. Guarantees have a combined
operating and real estate lending limit of $762,000. Direct loans
have a $200,000 limit. They can be used to purchase or improve real
estate or to cover operating expenses such as crop inputs; operating
debt and purchases of equipment, livestock and farm vehicles.
The FSA works in partnership with conventional lenders, as it is
willing to provide guarantees on loans they issue or take a second
lien position to a financial institution on real estate loans exceeding
$200,000. Because the FSA obtains funding directly from the U.S.
Treasury, it is able to offer a rate on its loan products that is
slightly below prime. The agency is able to loan up to 100 percent
of the securities' market value.
In 2000, FSA Farm Loan Manager Gregg Bongard successfully issued
the first FSA loan to Hmong borrowers. 2/ The
loan enabled Der Thao and Nikk Cha to purchase 65 acres in Minnesota's
Dakota County, where they grow flowers and Asian vegetables for
sale at the St. Paul Farmers Market. In addition to the initial
real estate loan, they received subsequent FSA financing for greenhouses,
a shed, a well and site improvements. The greenhouses are extremely
important, as they lengthen the growing season, opening additional
opportunities beyond seasonal farmers' markets.
To expand credit opportunities to other Hmong farmers, Bongard
has worked with a number of lenders to increase their knowledge
of the types of produce that Hmong farmers typically grow. In one
case, Bongard worked closely with a bank to help a borrower obtain
a bridge loan that was needed prior to the expiration of a purchase
contract. It was the first bridge loan approved for a Hmong farmer
in the state of Minnesota. Bongard will soon close direct real estate
loans with two other Hmong applicants.
University of Minnesota Extension
Two programs from University of Minnesota Extension (Extension)
provide knowledge and intensive technical support to help ensure
that new immigrants have access to sustainable small-scale farming
opportunities. The programs also help growers connect with farmers'
markets throughout the Twin Cities area, acting as intermediaries
between growers and market administrators.
Farming Incubator Program. For the past three years,
Extension has administered the Farming Incubator Program (FIP),
which combines classroom training with hands-on growing experience.
Current program participants are immigrants, although Extension
Community Program Specialist Yang indicated that the program might
be open to nonimmigrants in the future. The primary objectives of
the program are: to teach food production jointly with farm management
and business planning, give new farmers an opportunity to refine
growing techniques and enable new farmers to build equity so they
can purchase land when they exit the program.
During the growing season, participants farm one- to three-acre
plots. In the winter months, they pursue coursework on a range of
topics, including production, processing, business management, record
keeping, cash flow, marketing and food safety. Participants pay
a minimal amount of tuition, to offset plowing and water costs incurred
by the University of Minnesota, and can stay in the program for
up to three years. In 2003, the FIP has 39 Hmong, East African and
European participants who will farm a total of 100 acres at the
University of Minnesota Outreach, Research and Education (U-MORE)
Park in Rosemount, Minnesota.
New Immigrant Farm Program. In 1998, Extension launched
a program specifically tailored to meet the needs of immigrants
who currently rent or lease land across the Twin Cities metro area.
The New Immigrant Farm Program (NIFP) provides training and assistance
to help these growers increase their productivity.
The program offers culturally appropriate materials in English,
Hmong and Spanish on the following topics: integrated pest management,
post-harvest handling, marketing and soil fertility management.
NIFP workshops feature agricultural experts from the University
of Minnesota faculty, USDA's Farm Service and Risk Management Agencies
and the Minnesota Department of Agriculture. About 85 percent of
the program's current participants are Hmong, and the remaining
participants are from East Africa, Europe and Central America.
In addition to offering an educational component, the NIFP helps
new immigrants navigate the real estate buying process and will
act as an intermediary between land sellers and real estate agents
Graduates of the NIFP have successfully gained membership in the
St. Paul Farmers Market. The program also established a linkage
with the Emergency Food Shelf Network, which will buy directly from
growers at U-MORE Park and deliver the produce directly to low-income
families. (For more information on the FIP or NIFP, call (651) 423-2413.)
A developing market
New immigrant farmers will continue to face challenges. Barriers
to land purchase, financing and marketing persist, and farmers who
succeed in overcoming them must meet the additional challenge of
opening new markets and increasing the scale of their operations
Through financing offered by the FSA and assistance offered by
innovative programs like the FIP and NIFP, more and more new immigrant
farmers in the Twin Cities area are succeeding. As a result, lenders
are becoming increasingly interested in this segment of the market.
Some are beginning to develop networks and expertise in the new
immigrant agricultural sector. With a growing immigrant population
in the Twin Cities, the development of new programs to encourage
and support immigrant farming, and increasing attention from lenders,
it should be an interesting market to watch.