Loans helping new, urban-area farmers

Brenton Johnson left a government engineering job five years ago to become an organic farmer in East Austin.

While that sounds like the fantasy of many urbanites, it’s becoming the reality for a new generation of younger farmers. Some are turning to agriculture as a new career. Others are returning to farming roots that go back for generations.

There are a few things helping support the recent uptick in new and young farmers in Central Texas.

First, Austin has a food culture that is obsessed with locally grown eatables, particularly organic and sustainably raised items.

Second, prices for livestock and commodities such as corn and cotton have hit record highs in the past few years, making agricultural ventures more attractive.

And third, the Farm Service Agency, a quiet federal office that doesn’t get a lot of attention, has been loaning millions of dollars, with $12.6 million this year alone, to farmers and ranchers in Central Texas. The number of farmers receiving such loans has more than quadruped in the last 10 years.

The boom in lending is largely attributable to the agency’s new microloan program and the diversity of agriculture in the Central Texas area, said Terri Treviño, Farm Service Agency farm loan manager for Central Texas. These loans of $35,000 or less are allowing small-scale operators to enter agriculture. A full-scale farm loan is up to $300,000 for land and $300,000 for equipment and operating expenses, she said.

Johnson says taking up farming was a risky decision, but one of the best he’s ever made.

“Farmers in Austin are rock stars,” Johnson said. “People have so much appreciation for where their food comes from.”

Out of the backyard

Johnson, 40, started his organic vegetable farm in his East Austin backyard in 2002. He had a few extra veggies and hauled them to a farmers market.

“They asked me how much for the broccoli and the kale, and I figured out I didn’t know everything because I had no idea what to charge,” he said. “It was basically a hobby that got out of control.”

He asked those first customers to pay what they thought was fair. That first day at the market, he brought home about $100. Last week at market, his produce brought in $24,000.

When he outgrew his backyard plot, Johnson was able to buy 20 acres in East Austin and 180 acres east of town. His company, Johnson’s Backyard Garden, has expanded and now participates in a community supported agriculture model that sends locally grown produce to the homes of residents who pay for the service. It has 2,000 members. Johnson’s Backyard Garden also sells to 200 restaurants in the Austin area and grocery stores like H-E-B and Whole Foods. The company, which expects to earn about $4.5 million in sales this year, recently expanded to Dallas.

“We didn’t have a grand plan at all to do this, but just by sheer luck we ended up in the best place in the whole country to be in the business we’re in,” said Johnson, who lives in a double-wide mobile home on one of his farms. “Some of the best farmers markets in the country are here as well as the support for local food in the community.”

Johnson said the total amount he borrowed from the Farm Service Agency grew to $1 million over the past few years. He’s managed to pay down $650,000.

So far this year, the Farm Service Agency has loaned $12.6 million in Central Texas, Treviño said. The money is used to buy land and equipment and to cover operating expenses. That’s up from $9.5 million loaned in 2010. Ten years ago, her office loaned out a fraction of that — $1.8 million.

The agency isn’t a typical lender. It offers interest rates between 1.25 percent for the microloans and 3.37 percent to buy land for those unable to get conventional credit. Its loan managers work with farmers and ranchers to develop a business plan and a feasibility study before the loans are granted. The agency’s loans have a 98 percent repayment rate, Treviño said.

Some of the funds are targeted directly at those with less than 10 years of experience in agriculture. Other funds are aimed at minority groups in agriculture, such as women.

The rise of smaller farms is also creating opportunities for other kinds of agricultural jobs.

Raul Vergara and his son-in-law, Mark Bradley, are professional beekeepers who have placed their 85 hives on organic farms within 35 miles of Austin. They get to keep the bees on the farms for free, and the farmers get increased pollination and bigger yields.

With help from a Farm Service Agency microloan, Bradley and Vergara launched the Austin Honey Company last year. They sell honey, whipped honey spreads and honey lip balm at local farmers markets. They are on track to reach 100 hives or more this year and are making a living, they said. They also offer beekeeping classes.

“Maybe we’ll be an example to people in other parts of Texas,” said Bradley, who left a job as a commercial landscaper to become a full-time beekeeper. “Organic production needs pollination.”

The next generation

Getting younger people and new farmers and ranchers involved in agriculture is necessary if America wants to keep feeding itself, said Mark Welch of the Texas A&M AgriLife Extension Service. The average age of the American farmer was about 57 when data was last collected in 2007, he said. The average age has been on the rise for decades, but, for the first time, he has hope that it will go down.

“As our farmers get older, who is going to farm the land?” Welch said. “If all of these new folks make a small contribution, it creates a network of providing for the needs of their neighbors.”

Johnson says there are a lot of potential farm plots, even in urban areas, that are going unplanted because there are many barriers to entering agriculture. He doesn’t think his agricultural engineering degree from Auburn University in Alabama prepared him to be an organic farmer. Farmers have to understand everything from soil science to pest management.

“I didn’t have a clear pathway to get into farming, and I went to an agricultural school,” Johnson said. “I would love to see our community be a lot less dependent on food being trucked in from other places, and I don’t see any reason why we shouldn’t grow more of our own food. We have a good climate and good soils.”

Johnson is in the process of launching a nonprofit, Farmshare Austin, that will offer six-month paid courses on his organic farms where students can learn production techniques, he said. He hopes that a new generation will consider farming as a career. Classes are planned for spring 2014.

“It’s very encouraging to see young people take an interest in farming and ranching,” Treviño said. “Farmers and ranchers provide food and fiber that feeds and clothes the world and provide jobs to improve the rural economy.”

Editor’s note: An earlier version misidentified the state where Auburn University is located. It is located in Alabama.

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