Pete Johnson was amazed by how the community rallied to support his business after his barn burned to the ground in January of 2011. Donations poured in from individuals and organizations, from all corners of Vermont and beyond. The kindness of others meant Pete’s Greens could begin rebuilding their barn almost immediately and be back in business for the coming growing season. Inspired, Pete imagined the day that he could “pay it forward” by seeding a loan fund for Vermont farmers with “repayments” of the generous contributions he received in his time of need. The Center for an Agricultural Economy shared Pete’s vision and offered to partner with him, providing guidance and infrastructure. The Vermont Farm Fund was born.
Conceived as a true revolving loan fund, the VFF uses payments made from one generation of loans to finance the next. The result is a growing community of farmers lending money to farmers when it is most needed, in a timely manner, and without a lot of red tape. When farmers and food producers take a loan from the VFF, they become part of the larger agricultural lending community; it’s their payments that are in essence “paid forward” to be invested in other sustainable businesses, promoting a virtuous cycle.
When Tropical Storm Irene devastated a large number of Vermont farms in August 2011, it was clear that the Vermont Farm Fund could play an important role in the agricultural recovery. Though still recovering financially from their own disaster, Pete’s Greens paid forward a large sum of the donations they had received into the new fund so that the VFF could start giving loans to farmers in crisis. Once word got out about the fund, individuals, community organizations, and even classrooms of school children were making donations to the VFF. The Burlington, Vermont-based Waterwheel Foundation generously donated another $50,000. Less than 3 weeks after the disaster hit, the Vermont Farm Fund began sending out checks for interest-free loans of $5,000 or $10,000 to farmers impacted by Irene.
Less than a year after the Irene disaster, the VFF was in a position to start considering loans to farmers for non-emergency situations. Business Builder loans are awarded to farmers and food producers to help capitalize their business ideas. Start-up businesses, especially in the farming sector, are usually turned down by traditional lending institutions, making it very difficult for an entrepreneur with a great idea to get off the ground. The VFF balances risk with opportunity and has supported new farm and food ventures with $5,000 to $30,000 loans – businesses that will someday play an important role in Vermont being able to feed itself.
When farmers have been struck by disaster, or a new business has a great idea to increase their efficiency or create a new product, they are best served with quick and easy access to a loan with friendly terms. That’s why the VFF was designed to make borrowing as easy as possible, while still protecting the integrity of the fund. The Advisory Board responds to loan applications within 10 days and payments can start as soon as 14 days.