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Five Years of Funding Farms

Bread and Butter Farm
A Business Builder loan helped Bread and Butter Farm

Written By

Caitlin Gildrien

Written on

November 25 , 2015

Early on a January morning in 2011, Pete Johnson of Pete’s Greens in Craftsbury heard a funny noise. When he looked out his window, he saw his barn engulfed in flames. The building and all of the equipment and product inside was in the process of becoming totally destroyed—and everything had been substantially underinsured.

This personal tragedy was met immediately with an outpouring—what Pete calls an “overwhelming amount”—of generosity. Local and statewide fundraising gave Pete a solid foundation to begin rebuilding the barn, this time with expanded processing and storage capacity, and the farm was using its new building by July of that year. By then, Pete had already contacted his friend, local foods advocate Robin McDermott, to discuss the idea of “paying forward” the funds he’d received. They formed an advisory board and partnered with Hardwick-based Center for an Agricultural Economy to create the Vermont Farm Fund, which was intended to be a revolving loan fund for other farmers facing a crisis.

The next month, numerous crises arrived on the winds of Tropical Storm Irene. Dozens of farmers were among the many Vermonters impacted by Irene’s high winds and flooding, which wiped out crops, infrastructure, and even the very soil on some farms. The destruction from Irene “kicked us into gear,” Pete says. The Fund began receiving additional donations, including $50,000 from the Waterwheel Foundation. Eleven zero-percent-interest loans were made to impacted farmers in the months following Irene. These funds covered repairs, new equipment and infrastructure, and sometimes simply paid the bills until farmers could get on their feet again. As farms did recover and those loans began to be paid back, Pete and the VFF board looked toward their next step.

It turned out that, in the absence of a major statewide catastrophe, the demand for emergency loans was not as great as they’d expected. “We generally do about one emergency a year,” Pete says, “but, thankfully, there haven’t been that many disasters on farms.” So VFF decided to also offer loans to businesses looking to expand or invest in new infrastructure or ideas. Initially called Innovation Loans, the name of the program eventually became Business Builder Loans, which are available to food-processing businesses as well as farms. “People seemed to think that they needed to have some brilliant, new, innovative idea to apply,” Pete says. “We think most farmers are pretty innovative as it is, but Business Builder really sums up what it’s all about.”

In 2014, the Business Builder program raised its maximum loan amount from $10,000 to $30,000, a change that Pete says improves both the impact and the stability of the Fund. “We’re able to work with more established businesses, with bigger projects.” And those larger, dependable loans enable the Fund to sustainably take some risks.

Click on photos for captions


As a program of the Center for an Agricultural Economy in Hardwick,, the Fund keeps its overhead low. Its sole paid staff member, program manager Nancy Baron, works part-time out of her home in Warren. The Fund’s low interest rates – zero percent for Emergency loans and only three percent for Business Builders – means that annual fundraising is required to cover overhead costs. In addition to those low interest rates, one of the Fund’s selling points is its “no-hassle” application process. “We do our due diligence,” Nancy says of the application screening process. “But relationships count for a lot.” While credit history certainly plays a role, applicants can potentially overcome a poor credit score with strong business plans and references.

“I think our loans are really more binding than a bank,” Nancy says.“ They know that if they default, the funds won’t be there for the next farmer to recover from a disaster or finance their great idea.” The Fund has never had a default, she says, then pauses. “A few...revised payment schedules. But no defaults.”

Pete echoes this sentiment. “It’s part of the beauty of Vermont that somebody always knows somebody who knows the applicant. The whole thing feels personal to everybody involved. We’ve had no defaults, not because we haven’t made risky loans, but because everybody believes in the mission of it, that the money goes back to another farmer. Some farms have paid back their loans and are now coming back for second ones, which is great.”

In addition to relying on good references, the Fund also leans heavily on the experience of its board to determine which Business Builder projects are likely to result in real improvements to the bottom line of the businesses that apply. Loan recipient Randy Robar of Kiss the Cow Farm in Barnard found that agricultural literacy a major benefit of working with the fund.

“Traditional lenders don’t understand anything to do with farming,” he says. “But the board has real farmers on it. They get it, you know? And that’s hugely helpful.”

The board includes University of Vermont Extension’s Vegetable and Berry specialist Vern Grubinger, Center for an Agricultural Economy’s Executive Director Sarah Waring, and former dairy farmer Bruce Urie, in addition to founding member Robin McDermott and Pete himself. Pete believes in “easy loans” rather than grants for businesses, since they cultivate a more robust business, and then feed their success back into the larger community. Kiss the Cow used their loan funds for equipment to pasteurize and process their milk into ice cream, diversifying their income beyond the relatively limited market of raw-milk sales.

Business Builder loans have enabled other dairies to install pasteurization and processing equipment, allowed for expansion of facilities for washing and packing produce, improved nutrient management systems, and funded expansion of buildings and facilities. They also have acted as working capital for farms receiving “payback grants,” such as those given by the Natural Resource Conservation Service for erecting hoop-houses.

Aaron Locker of Kingsbury Market Garden in Warren is one of those on his second loan from the Fund. The first, an emergency loan, was awarded after floodwaters from Irene ruined produce and washed away precious topsoil. His was the first of the Fund’s loans to be paid back in full, and this past summer he received a $30,000 Business Builder loan, which he used toward the purchase of two tractors and a flat-bed truck, and to build a greenhouse and pole barn. The equipment will increase efficiency, saving hours of traveling by tractor to remote fields, while the new buildings will help Aaron use his staff more effectively year-round by expanding the season for growing and processing.

“Working with the Farm Fund has been great,” Aaron says. “The terms are great, and the money goes back to another farm. Once I pay this one off, I’ll probably just turn around and apply for another.”
For application information and a list of farms that have benefitted from the Vermont Farm Fund, go to vermontfarmfund.org.

About the Author

Caitlin Gildrien

Caitlin Gildrien

Caitlin Gildrien is a writer and graphic designer in the Champlain Valley of Vermont. With her husband and two small children, she also grows several acres of organic vegetables and medicinal herbs on their 200-year-old farmstead.

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