Today, the U.S. Department of Agriculture (USDA) and partners announced the launch of the Southern Farmers Financial Association (SFFA), a new cooperatively-owned institution created to increase access to capital for its member member-owners to begin farming or strengthen existing small farming operations and agriculture-based businesses in high poverty areas in the Southeast. The organization is supported with $20 million in initial funding from President Biden and Vice President Harris’s Inflation Reduction Act, which will be used to leverage private sector capital, recruit full-time staff, and begin outreach and lending efforts.
The Southern Farmers Financial Association will be managed by Cornelius Blanding, acting chief executive officer; Shirley Sherrod, acting secretary; and Calvin King, acting treasurer, until a board is formed and initial hires are made. Each of these individuals brings lifelong expertise and personal experience with farming, farm finance, and helping rural, smallholder farmers maintain farm operations in the face of challenging financial situations.
“The launch of the Southern Farmers Financial Association furthers the Biden-Harris USDA’s vision to keep farmers farming, support rural economies by making it viable for small farms to stay in operation, and make USDA’s programs more accessible and inclusive for everyone who wants to participate in agriculture,” said Agriculture Secretary Tom Vilsack. “This new organization will provide a vital bridge to those who may benefit from a different model of outreach, support, and farm lending.”
Farming is a capital-intensive business. It can be difficult to begin or stay in farming without the financial foundation that comes with generational farm operations, and smaller farms are especially vulnerable to the financial blows that come with natural disasters, lost markets, or other sudden impacts. Under a cooperative agreement with USDA, the SFFA will improve land access by creating access to capital and technical assistance for farmers and other producers who have historically faced challenges getting the financing they need so their farms can grow and thrive.
On Thursday in Atlanta, at the National Center for Civil and Human Rights, USDA representatives and SFFA interim leadership gathered with stakeholders and farmers who would potentially receive funding from their new financial institution.
Zach Ducheneaux, Administrator of USDA’s Farm Service Agency, who has spearheaded many changes at USDA to improve the farm lending process, applauded the organization’s launch. “As a child of the 1980’s farm crisis, I have seen firsthand the challenges farmers can have accessing capital, and the very difficult impacts that creates for individuals, families, and communities that stand to benefit from strong farming operations. I am excited to see these partners come together and reach farmers in a way that USDA recognizes we may not be able to.”
“Every farmer needs affordable financing. Farmers must have reliable and consistent access to capital to be successful,” said USDA Under Secretary for Rural Development Dr. Basil Gooden. “For too long, access to capital has been out of reach for small farmers in the southeast region.”
Support from the USDA will help bring other partners to the table so that SFFA can obtain strategic certifications and raise additional sources of capital. Examples include working with organizations like the Farm Credit system and Co-Bank to obtain Other Financial Institution (OFI) status, or working with the US Department of Treasury, Community Development Financial Institution (CDFI) Fund to become a CDFI, and continued engagement with USDA so that the institution can become a guaranteed lender with the Farm Services Agency.
"Supporting southern farmers is essential to supporting rural economies in communities across the south," added Shirley Sherrod, acting secretary of the SFFA.
"The SFFA and USDA are building up the toolset southern farmers can use to support their family farms and pass them on to the next generations," said Cornelius Blanding, acting Chief Executive Officer.
“This agreement will open up new opportunities for historically underserved southern farmers to sustain and grow their businesses,” said Calvin King, SFFA acting treasurer.
The SFFA will build on several steps USDA has taken under the Biden-Harris Administration to expand access to capital, keep farmers farming, and make its programs more accessible and equitable. For example:
- USDA established a 41-member Equity Commission through the American Rescue Plan Act which is comprised of individuals who have personal and professional experience with USDA programs and are advising the department on how to address the hard reality of past discrimination and its lingering harm. In February 2024, the Commission delivered its final report to USDA (PDF, 2.0 MB), and many of the recommendations are already being implemented. Every agency at USDA has created an equity action plan, with steps to make its offerings more equitable and accessible, tailored to its unique stakeholder set.
- USDA provided $67 million in competitive loans through its Heirs’ Property Relending Program which, launched in July 2021, allows intermediary lenders to help agricultural producers and landowners resolve heirs’ land ownership and succession issues. Heirs’ property and other land tenure issues have long been substantial barriers preventing access to USDA programs for many producers and landowners, and this relending program provides access to capital to help producers find a resolution. The program’s benefits go far beyond its participants; it will keep farmland in farming, protect family farm legacies, and support economic viability.
- In June 2023, USDA announced the investment of approximately $300 million to fund 50 innovative projects to improve access to land, capital, and markets for underserved farmers, ranchers, and forest landowners, who often face high barriers to entry in farming, which is capital-intensive. The Increasing Land, Capital, and Market Access Program promotes access to farm ownership; strengthens results for those with heirs’ property or fractionated land; increases access to markets and capital that affect the ability to access land; and improves land ownership, land succession, and agricultural business planning.
- The department invested $262.5 million in institutions of higher education to foster the next generation of diverse agricultural professionals across the nation. The National Institute of Food and Agriculture’s (NIFA) grant, “From Learning to Leading: Cultivating the Next Generation of Diverse Food and Agriculture Professionals Program” (NextGen), will enable eligible institutions to cultivate and sustain the next generation of food, agriculture, natural resources and human sciences workforces. This includes efforts to strengthen USDA’s workforce through enhanced educational support, experiential learning, and exposure to early career opportunities. Eligible institutions include 1890 Land-grant Universities, including some Historically Black Colleges and Universities (HBCUs). As part of the $262.5 million investment, 33 project partners will provide training and support to more than 20,000 future food and agricultural leaders.
- USDA established the American Rescue Plan Technical Assistance Investment Program, designed to improve awareness of and equitable participation in the full range of USDA programs and services among historically underserved farmers, ranchers, forest landowners and operators through supporting the organizational delivery of technical assistance projects and establishment of technical assistance networks.
- Through the Cooperator network, support has reached nearly 90,000 participants through face-to-face meetings, webinars, online courses and one-on-one technical assistance sessions.
- From support of those Cooperators, more than over 3000 participants have already received a USDA benefit that has allowed them to start farming, increase farm size or capacity, increase farm profit, or receive a USDA farm loan.
- USDA has also transformed its farm loan processes, simplifying the application processes to make it easier for farmers and ranchers to get and use farm loans. Applicants now spend half the amount of time filling out an application and, for the first time, can do this online. USDA updated the farm loan rule, based on feedback from farmers, that will help farmers and ranchers make more money and invest in their farms. These changes are designed to make it easier for farmers to manage their finances and invest in their future.
For more information about these efforts and more, visit USDA.gov/equity.
USDA touches the lives of all Americans each day in so many positive ways. In the Biden-Harris administration, USDA is transforming America’s food system with a greater focus on more resilient local and regional food production, fairer markets for all producers, ensuring access to safe, healthy and nutritious food in all communities, building new markets and streams of income for farmers and producers using climate smart food and forestry practices, making historic investments in infrastructure and clean energy capabilities in rural America, and committing to equity across the Department by removing systemic barriers and building a workforce more representative of America. To learn more, visit www.usda.gov.
Source : usda.gov