In this episode we talk with Pomai Weigert with GoFarm Hawaii and Linus Tavaras from American AgCredit about a new grant matching program they have partnered to create for ag producers needing $10-$25,000. We talk about the details of this new program, but also review the range of financial assistance and support services each organization provides for the Hawaii ag community.
This podcast is brought to you by University of Hawaii College of Tropical Ag. and Human Resources (CTAHR), and the Seeds of Wellbeing or SOW Project. This podcast is supported by the Farm and Ranch Stress Assistance Network (FRSAN) grant from the U.S. Department of Agriculture, National Institute of Food and Agriculture and Hawaii Department of Agriculture.
#wellness #mentalhealth #farming #agriculture #ranching #stress #hawaii #stressmanagement #agproducers #agfinancing #agloans #aggrants #gofarm #americanagcredit
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In this episode we talk with Pomai Weigert with GoFarm Hawaii and Linus Tavaras from American AgCredit about a new grant matching program they have partnered to create for ag producers needing $10-$25,000. We talk about the details of this new program, but also review the range of financial assistance and support services each organization provides for the Hawaii ag community.
This podcast is brought to you by University of Hawaii College of Tropical Ag. and Human Resources (CTAHR), and the Seeds of Wellbeing or SOW Project. This podcast is supported by the Farm and Ranch Stress Assistance Network (FRSAN) grant from the U.S. Department of Agriculture, National Institute of Food and Agriculture and Hawaii Department of Agriculture.
#wellness #mentalhealth #farming #agriculture #ranching #stress #hawaii #stressmanagement #agproducers #agfinancing #agloans #aggrants #gofarm #americanagcredit
Resources:
Find out more about us:
The views information or opinions expressed in this episode are solely those of individuals involved, and do not necessarily represent those of the University of Hawaii College of Tropical Agriculture and Human Resources, our funders, or any of the organizations affiliated with this project. Welcome to a Seeds of Wellbeing"Experts in the Field" podcast featuring people working in their fields of expertise to provide support for agriculture producers in Hawaii, in the United States, and in some cases around the world. These podcasts were made possible by a grant from the University of Hawaii College of Tropical Agriculture and Human Resources, also known as CTAHR, and the Seeds of Wellbeing or SOW Project, and is supported by a grant from the US Department of Agriculture, National Institute of Food and Agriculture, and the Hawaii Department of Agriculture.
Linus:But I'm gonna look at plan, is their plan reasonable? Does it make sense? You know I've seen a lot of budgets and proposals in my 40 years. So does it really make sense? So gonnaʻ look a lot of that. Also look at their financial picture. see how they stand financially? Look at the purpose of the loan, you know, what is what is it going to be spent for?
Pomai:And that, you know, that we really are in their corner and we really, we know what they need, and there are a lot of, you know, the paper push is real. And that that is a huge part of make or break in, in business in general, but especially in agriculture, so I just wanted to share that. So you know, and even just being able to get these insights for for anyone who did apply for the matching, like you heard it here, he told you what he's going to be looking for. Why don't we start with introductions? Maybe Linus, do
Jim:In this episode, we speak with Pomai Weigert, with GoFarm Hawaii and Linus Tavares from American AgCredit about a new grant matching program they have partnered together on to provide funds for ag producers needing anywhere from $10-25,000. We talk about the details of this new program, but also review the whole range of financial assistance and support services each organization provides for the Hawaii community. Now let's hear more from Pomai and Linus. you want to give a quick introduction?
Linus:Sure. My name is Linus Tavares I'm Senior Lending Officer for American AgCredit here in Hawaii. I've been with the Farm Credit System for over 40 years. Iʻve been with them since I graduated from college - shout out to Shamanad University- and but originally from Maui, and and housed in the Hilo branch. by cover the whole state,
Jim:Right, on the Big Island. But you're you're kind of the point person for the islands all the islands, yeah?
Linus:For the state
Jim:And Pomai?
Pomai:Hi everybody. I'm Pomai Weigert and I'm with GoFarm Hawaii. We are a statewide beginning farmer training program that trains people to become farmers, but also to start and maintain farm businesses. So we have training sites across the state. We have two on Oahu. We have one on Kauai one on Maui, and one on Hawaii Island. And then we also have a consulting, agribusiness consulting firm side arm of our organization where we're able to provide technical business assistance and guidance in areas like financial planning, marketing, analysis, cash flow, all of the things that you need to run your business. So kind of really taking that practical, and then matching it with the technical to make sure that our farmers are able to maintain sustainable businesses and lifestyles.
Jim:That's great. Thank you. And the GoFarm programs are like a whole wide reach and range of options available, right? From agCurious, which is a couple three-hour sessions through through an agIncubator program where land is potentially available and up to three years. Yeah, so a whole wide range of programs. Yeah,
Pomai:Yeah, it's, it's actually like a sequential program so in order to get to in order to get to the end, you have to go through the beginning and middle. So you can't just jump around in our program. It does start with the AgCurious which is kind of like the informational session so that we can we all together can decide if like this program is going to be right for you. And then then after that, we do a series of workdays so like, Okay, you still you still think you're in love with farming and you still want to be a part of sustainability. And we actually take you around have farms, and have you work in farms that kinda like practice days to see if you can handle it that definitely weeds people out, you know, once they actually have to work, then they're like, oh, maybe, maybe no, this isn't for me. And then after that, we go into more of the program training where we actually give you, your land and your plot, and we teach you all of that technical assistance. And if you're still thriving at that point, then most of our sites have incubation where we're able to provide you with land access, for a limited time and also for a small fee, so that you can kind of get your feet wet, get your use it as a launching pad for your forever farm. And that's, that's at that point, you will have started your own business and you have your plan. And you're you're seeing your future.
Jim:Got it. And the ag business services, that consulting, is that available to anyone or do you need to be in one of those programs that you mentioned in that full spectrum?
Pomai:Ag business consulting services are open to anyone who
Jim:Got it. Thank you. And Linus, American AgCredit, right, is doing an agribusiness or agribusiness-related things in the state of Hawaii. So it is Hawaii based. You can't be doing, you can't be, we can't consult for you if you're, you it's it's a slogan is "Money for Agriculture" yeah? You've been know, in Illinois or somewhere or India. We get a bunch of different, we get a whole bunch of people asking for help, So our program is Hawaii based and is focused on agribusiness. So if you are someone who touches that, and need some assistance, and and has the bandwidth. Like we, there's only three of us in doing this for 40 years. Has it always been American AgCredit or the consulting team, so what we do is we kind of assess like, what we can do and what you can do and how you can help. And or if we should refer you to another consultant or just another planner or just what you are looking for we're able to has there been an evolution there that you've seen over the years? kind of help guide since we work with throughout the agricultural industry a lot.
Linus:We merged, in 2019 we merged with American AgCredit prior to that we were Farm Credit Services of Hawaii, kind of a standalone Hawaii, Hawaii agricultural bank, so American AgCredit Farm Credit institution, our purpose is to lend money to farmers, ranchers, fishermen, the like. Anything for the production of food or fiber. We were a standalone association for over 50 years here in Hawaii, then in like I say, in 2019, we were approached to form a combination or merger with American AgCredit. At that point in time, we were a $78 million bank, American AgCredit came in as a $15 billion bank. A lot more resources, a lot more funding opportunities. So again, in 2019, we decided to merge and became part of American AgCredit, which covers seven different states.
Jim:Great. Part of why we're talking today, the three of us is for the for the UH CTAHR, SOW or Seeds of Wellbeing project we did a survey. Had about 350 ag producers responded. It was a rather lengthy survey about some of the stressors they see in ag production on the islands, and as you can probably both guess, near the top of that list of stressors is financial and access to finances and resources. Recently, there's this great program that that was just launched, it's just starting its first year now of a ten year program, and maybe Pomai do you want to start us off and just kind of give a review of what the that new grant matching programʻs about
Pomai:Sure. We are so grateful to you guys Linus. I just want to say that like on the on the officially, you know, to American AgCredit and CoBank you know, for really seeing us and seeing what we do for the farming community. We're really like aggregators. We're like the intermediaries, I think they call them you know, where we need more people who can advocate for our farmers like on the tech and financial end. So you know, a lot of the challenge a lot of the challenge comes from the farming community, the rural and cultural communities that don't have the skill sets to get ready or prepared to access funding. So this this matching program, I mean, we really got into strong partnership with American AgCredit. It will run every year. We've already closed applications for this year, but the process, you know, and the process is, you know, simple financials, application, we might ask for a little pitch, so that we, you know, we can get a gauge on what are you going to do with this with this money, you know, it, it really takes partnerships. So, I mean, everybody has to level up like everyone, I mean, and that is sometimes stressful, that is sometimes a big challenge. So, what our program kind of helps provide is like, that support that hand holding, for getting you ready. For getting you ready for the things that we need. And it also kind of requires this trust from, from them at American AgCredit, like working with us knowing like, Okay, if we give this to you guys do it the right way, when you're giving it out to people, and, you know, make sure they're ready and make sure they have, they know what their purpose is they have their numbers fleshed out and penciled out, as a way to support them. I think that also, also, as we were looking at, like, "Hey, who do we want to, to get this opportunity?" we were also able to write in 10 hours of community service also time for us to check in with the with the grant awardees, when they get when they get awarded the funding, like we want to make sure that you're doing, you know, like, we're tracking your progress, and that largely comes from our program itself, so we kind of took things that are in the girlfriend program, which if anybody has been actually in the girlfriend program, I mean, we're always knocking on your door, we're making sure that you are like, "Hi, it's us again> What are you doing? What's your plan? What's your course of action?" So we really did build those things into the, into the selection process of this of this grant to, to also prepare farmers for when they don't have us, they're like, watching their every move gathering them along, that's what it's gonna be like for other grants that are the grants or loans that are in the world.
Jim:So it's kind of a leg up on the whole grant, and funding process as well, that you're able to handhold through which is great. Linus, I noticed on on the American Ag website, that there's a section that's "Young, Beginning and Small Farmers," is this an extension of that program? Or is this a very unique thing that we're doing in Hawaii?
Linus:No, this this is definitely an extension of it. I mean, we're big supporters of young beginning farmers, young beginning and small farmers. So the, because, you know, as we go on, I mean, right now, I think the average age of a farmer, and it's no different in Hawaii is like 60, 60-plus is the average age, so there's a lot guys older than that, that are still farming. And we're looking at, at the narration, you know, if we're going to continue to provide food for our country, and for our state, we need to look at the young, small farmers, and bring them up, bring them aboard, so that they can get to a point where they are serious major food producers. And you know, the state of Hawaii also has its own definition of wanting to be self sustainable. You know, COVID really brought that forward, how we were in sustainability. So again, we are big fans and American AgCredit of that. We are actually being told to push that as much as we can, because again, it's all through the country and this, this is part of one of our moves to get that going here in Hawaii.
Jim:And it sounds like it's very much in sync with the mission of GoFarm, right, which is increasing the number of sustainable local ag producers on the islands. So this has been your first year. So there's, as I understand it, the million dollars is divided out over 10 years. So $100,000 per year is allocated. Grants are between$10-25,000 per applicants. And so their minimum request would be $10,000. So I guess we're talking about anywhere from 4 to 10 people per year. Is that right Pomai?
Pomai:Yeah, I mean, on our end, we're, we it's really open to anyone who's going to apply. I mean, we'll take you know, and the selection committee is going to be able to review those, you know, if we have four really good ones that are $25,000 that's four. So so you know, we're kind of just taking a look at which ones are viable and which ones are worthwhile, you know, that. We've seen so many we've seen so many plans, you know, we've seen so many dreams and wishes, but we're really we're really looking at it, like I said, like, what is that level up? Like how we give this boost? Is that just gonna go into you maintaining what you maintain? Wait, weʻre really looking for that, how are we helping you move the needle? How are we helping move the needle together? The other thing about this is it's a matching grant, so for the amount that you're asking for, you also have to have, and that that kind of weeds people out as well. We were actually kind of surprised, like how many people had matching that that applied, you know, and that just goes to show that farmers have saved or they are resourceful, or they are diligent about how they're able to get, you know, if you have 25, and we give you another 25, that's 50. And that could get you a lot of things. And that could grow a lot of food for many years. So we're really looking at that potential. And also that forecasting that planning, like who, who in these who in, in these applicants in these pool of applicants are looking, have that vision have that future and then can actually cancel it out so that it it makes sense?
Linus:Yeah, so and like Pomaiʻs, that's a matching fund. So now they can get their funds, either by way of savings, they can be getting it from a loan, be getting it from a gift from a parent or a family member, they can get it through a home equity, they can borrow it from us, or another lender. So there's doesn't have to be a cash, you know, our of personal savings, it can come from other sources. But again, if it if it is a loan, we're also gonnaʻ look at that when we figure out the repayment ability, because now you've got to also service that debt, you know, and we'll be looking at that as well.
Jim:Right. I noticed in some of the the articles about the program that CoBank was was noted as well as American credit. Could you tell us a little bit about CoBank, Linus?
Linus:Yeah, so CoBank is our funding bank, so let me give you a little drawing of how we get our money to lend to the farmers. One, we're not a federal agency, or state agency. We're private. So we get our money from the sale of farm credit bonds over the stock exchange, that money passes through CoBank CoBank directs that that move goes through CoBank, then CoBank passes it down to the associations for the Farm Credit entities like American AgCredit. There's various credit as Farm Credit associations out there, and American accurate is one of them. So, go back a little bit in history here, when when we merged, when we merged with American AgCredit, they said,"Hey, as part of this merger, in conjunction with CoBank," they said, "We want to give back some money to invest in Hawaii." So initially that they assigned $3 million, half of it would come from American AgCredit, half of it would come through CoBank, the initial funding of $2 million, again, went to GoFarms. And it was more for them to continue their operations. This last piece of the total, in this last one million, we originally tried to, try to put together some type of like interest free loan program, but it wouldn't work through through the UH system. It would work better if we if we made it as a grant. So that's where this last one million came. Again, these funds are cost shared with CoBank. So like this last million, we get 500,000 CoBank gives 500,000 through our direction. And that's where CoBank comes into play.
Jim:That's helpful.
Linus:It's all part of our initial, original merging of Hawaii Farm with American AgCredit.
Jim:All, part of the plan then got it. And I think I read somewhere that the, that first 2 million that you mentioned, was went to go farm, as you said, for ag technical training programs that they're doing, but is there also a correctional facility program that that's helping fund
Pomai:The original, the original gift that we got really was to help like maintain and strengthen our current program. So we have and that's all the sites across the state. So we have two on Oahu well two general programs on Oahu which are in Waialua and Waimanalo. And then we have one that is in Waiawa Correctional Facility, and then we have one on Maui in Kahului, one on Kauai in Lihui and then one on Hawaii Island and Alae. So all of those you know it takes a, I think a lot of people don't realize it. And we've had to remind folks that like, we also have financial stressors. You know, we're also we're a grant funded program, and, and we have, we have six states, I mean, we have six sites across the state, we, how are we going to keep all of those alive, you know, and that and, and it's, it's a part of our responsibility to let everyone know that being a part of our program is also a responsibility. Like we're not, we're not just getting this funding, so you can have a fling with farming and sustainability, like people are funding us so that we can create farmers more sustainable and, and strong food systems in in all of these places. So, you know, our farm sites, have tractors, have coaches, all of our, our team and and, you know, we don't have a big team, like we don't have, you know, we were able to do a lot with a really lean crew. But, you know, in regards to like infrastructure, helping build out wash stations, helping get risers for irrigation, like there are all these things that we kind of already have when you get there and, and really, it's a part of our job to help you understand that all of that has a cost. So you know, you we like these kinds of gifts from different donors and and people who really care about agriculture in Hawaii. It is our job to make sure that that that is that gets fit into our program to actually execute that mission. So where Waiawa, Waiawa is definitely, Waiawa Correctional Facility is definitely, everyone wants to know about that site, but it's really, it's really all the sites, you know, across the state and, and every location and community is unique, and has unique challenges has unique. However they want to be so we, you know, we really have to also be flexible and knowledgeable about each place so that we can have an understanding of even when we look at these plans, is that even going to work in your community? Is that, who do you know, who are you working with, who? Hawaii is a big small place, so the importance of also relationship building and not working as a form of helping move your project or your plans forward is really, really important.
Jim:Thanks for that, that additional information you've been through the first round now of applicants for the programs. Can you share how many applicants you had, or like, is how you being overwhelmed and, you know, just kind of any insights and to what kinds of applications you're getting?
Pomai:I really can't say, but I can say, I can say that we are going to hit the target, we are going to hit the target of having at least that many apply. So that's great, because you know, we're all sometimes, you know, in the ag community, there's funding, but no one goes after it. No one, no one goes after it. And and, you know, that's kind of a stressor for us, too. Because we're like, oh my gosh, how are we, we have this, we're going to lose it and a lot of times funding can we use it or lose it, so I think that was a little, you know, we were hopeful. We also saw people we knew, you know, we we run a farming training program. So we kind of know who has the potential to be successful. So I think the next phase now is the applications go to the selection committee, which is, Linus is on the selection committee. They take a look, they grapple it out, they see who who is the best fit for this first round. And like I was saying, you know, as we discussed, minimum 10. You know, the minimum was 10,000. But if there are four really good ones at 25,000. That's four right there. So we're excited. I'm excited to see who who pushes through.
Jim:That's great. And just to be clear to it's either young or beginning or small. Yeah. So young I think is 35 or younger, beginning 10 years or less in farming and ranching, and small being under $250,000 annual gross income. Did I get that right?
Pomai:Yeah, and one of the things for this grant specifically was to be a GoFarm alumni, right. So even if you weren't 35 years old, but where I go from alumni, you are still applicable. And that was and that was largely because like we're grooming you and training you to do this. So it kinda is able to give us a little bit more credibility, like where did you go to get help? How do we know that you know what you're might even halfway be doing, and that kind of has a lot to do with a GoFarm name. And, and our training program has really spoken for itself. I kind of wanted to ask Linus if he could, as a selection committee guy, is there, is there anything that's that you're specifically going to be looking for? When when you do your read throughs?
Linus:Well, you know, I'm a credit guy, right? So. So I'm sure I'm gonna lean a little bit more towards their credit then and has to be pulled back. But I'm gonna look at plan, is their plan reasonable? Does it make sense? You know I've seen a lot of budgets and proposals in my 40 years. So does it really make sense? As the person really know what they're talking about? You know? Or are they just throwing numbers out there and hoping and praying? So Iʻm gonnaʻ look a lot at that. Also look at their financial picture. See how they stand financially. Look at the purpose of the loan, you know, what is what is it going to be spent for, those kind things, and then look back upon the GoFarm people and says, Hey, you guys, mentored this person? You know, was, was he a good student, or she a good student? You know, did they, they follow all the protocol, or were they the kind that always taking shortcuts? You know, you know, what type of person that is? So, you know, character comes into play, you know, a lot as well. So that's what I'm going to be leaning heavily on, when throwing out my recommendations.
Jim:Like it must be great for you Linus to have a partner like GoFarm that knows the applicant so intimately, really, by the time they they get to the review process.
Linus:Yeah, I mean, you know, we looked for a while to find the right, right partner for our capital infusion into Hawaii. And sometimes it's hard to find the right partner, but, but GoFarms kind of fit the part. And it's they've very easy to work with very accommodating, very knowledgeable of what they do, and, and of agriculture and the agriculture community. So it's been, it's been a great partnership so far.
Pomai:That's great to hear, like, oh, you know, because I think why we match well, is because like, both of our systems are kind of strict. So so there's not like, everybody has to be strict. About about things, and that sometimes is not, you know, compliance is a big thing, I think, and, and even just sort of, you know, the root of this conversation, it's, it's so that we, you know, we can have these sort of high level hash outs, and then be able to translate it to our rural communities and our farmers and help better prepare them. So they're not afraid they're not afraid when they talk to Linus and he's going to ask them about their numbers, or what's their projection because like, we already did that with them. So you know, it's also a think about building, building that financial confidence. That's hard, that's hard, too. If you've been afraid of numbers, your whole life, which a lot of farmers, you will be surprised how much we don't have, I think what information we don't have. And that you know, that we really are in their corner. And we really, we know what they need. And there are a lot of, you know, the paper pushers real. And that that is a huge part of make or break in, in business in general, but especially in agriculture, so I just wanted to share that. So you know, and even just being able to get these insights for for anyone who did apply for the matching, like you heard it here, he told you what he's going to be looking for, you know, like so even if you didn't apply this year, those are things that like come if you're a GoFarmer, come to see us early. Don't wait like one day before the application to be like, "Hey, I heard the podcast and like I said he's gonna be looking for this helped me with this." Like, it takes preparation, it takes on on everyone's part. So I think also, being able to see our farmers grow, you know, like and build that confidence is really what we're also trying to achieve.
Jim:And it's actually something you weave into the curriculum for all your programs you describe so I think it really gives folks a leg up I think in this process. Is it is it alright with both of you, I have a link to to the application, and is it okay to share that too to folks or is that something you are keeping for just a select audience?
Pomai:No, you can go ahead and share it. Yeah, for, for that one, just reminding, it was the young, the new, the small, and then also the GoFarm alumni. So just letting every, reminding everybody, that's what that's kind of the requirement and that for this round this year, applications have closed. But next year is right around the corner team, like literally right around the corner.
Jim:So we can start. I mean, if I were a go large GoFarm alum, I could actually even start now on next year's application and start reaching out,
Pomai:Especially if you if you have a plan, and you know, because I, I know that there were some farmers this year that weren't ready, you know, it kind of came and they were like, oh, but now that you know that this is something that is potentially available to you, you can get your act together, you can figure out where you're going to get your matching, you can figure out if that's a good plan for your matching, you can, you know, start working on your financials for that plan. You can go and hopefully have good character. You can be good in the program. So we tell everyone that you were good in the program, like those kinds of things. Yeah, you could start now.
Jim:Okay, do your homework. So and I was interested too in the 10 hours of community service or did that come from American AgCredit? Or was that GoFarm? Or how did that come about?
Pomai:I think that was us. But But I don't think, I donʻt think AgCredit, American AgCredit disagreed. Any thoughts on that? Linus?
Linus:Yeah, I mean, we're big on community service so we felt that would be great. Throw that in too. You know, they need to service the community, as well. I mean, I know they are servicing the community as being farmers and providing food, but there's other ways as well, you know, and the more bang for buck we can get out of this program, the better if we can get more people out there in the community the better.
Jim:And I think you mentioned financial statements may feel a little scary for some folks that want to apply but how about community service? Any, any thoughts on how you think people are, are presenting they would fill that requirement?
Pomai:Yeah, well, if you were part of GoFarm, community service hours, were a part of what you did. So similarly, it would be you know, it could be things that help support new farmers that are coming in, being a part of panels, being a part of workdays, helping do education for new farmers coming in. I think that there are many ways and we're open to many ways, but I think what we're looking for is that, how are you serving more than yourself? And I think that that has, you know, really does tie in with, with Linus talking about character, you know, we want to just make sure that, that you're not just trying to get this grant to just be all for you, like, we're programs that are about moving the needle of food systems sustainability across the state. So like, how are you, how are you contributing, or giving back to that, in some way? And and that can be that can be, you know, done in so many different ways, we're really open to different methods, but then if you don't know, then we can definitely tell you, probably even connect you with places that you can give. But I think I mean, a big one is helping out new farmers that are coming through, helping be on a panel, sharing information, you know, just like what are those things that you're doing that are really help build your community up?
Linus:One, one good example, too would be service in helping out the food banks. Just seeing the food that gets processed to that thing. I mean, we did a volunteer day of employees. Itʻs amazing to see the food that gets processed through the food bank, on Oahu every day. That I think would be an eye opener for any farmer or any potential farmer out there.
Jim:And you're going to be reviewing those applications, so that's a good tip for anybody listening.
Pomai:I mean, if you're able to read between the lines here, guys, we're give, we're trying, you know, we're not we're not giving up any answers, but we're just saying, you know, these are, when we're thinking about it, these will be good places to start the journey.
Jim:That's great. Linus for the documents, like if I were to go to you and American Ag for a loan on, just independent of all this, the documents that you would require they similar to what we see in the list for the matching grants or is this less stringent, more stringent?
Linus:Pretty much I mean, we we'd ask for one year of tax return, we'd ask for a personal financial statement, and application form. We also get a little stricter on the credit, we'd like to see credit scores of 700 or better, that may not be the case here. But those four items, and of those four items, you know, we might also ask for a projection that might be your, your fifth item. The, the toughest of all that is probably the financial statement and, and a lot of times I walk them through that financial statement, because sometimes the farmer, you don't realize the value of your assets. You know, I had I had nurserymen, one time come in, and he's giving me his financial statement, listing all his assets. And I said, "Well, don't you, don't you have an orchid nursery? Potted orchid nursery?" He goes, "Yeah." I says, "You don't have any of your plants here as value." He goes "Well, but yeah, but I'm gonna sell them." I said, "Yeah but, how many plants do you have?" "Oh, I have over a million plants." And I said,"Even at a low ball of $1 plant," I said, "that's a million dollars, and assets." And, and just little like that, because you're, you're on it every day, you don't think about it, you know, even if youʻre like if you're a hog farmer, or cattlemen, or something, you know, you just on it, you just thinking of the income side. But that that is an asset. That's your income producing assets. So it's sometimes they forget, and they forget, oh, yeah, I forgot I had that tractor. Oh, yeah, I forgot to had, I had this, and, you know, start adding up, all forgets and the financial statement now turns from being marginal to exceptional, by just as asking the right questions. So a lot of times that's that's the main key ʻcause the tax returns are tax returns those show, you know, theyʻll show what you're reporting. But the balance sheet is something that is worth digging a little deeper into to find out the true, the true picture. That sounds like... so I kind of went on about that.
Jim:Oh, that's great. But it's it sounds like both GoFarm is a great resource to help you get them to that point as well. And then it sounds like you're also a resource too Linus, as needed, so that's, that's good to hear. Again, on the AgCredit site Linus, as I saw there, that young beginning and small loans, is that an option in Hawaii outside of the the this matching grant program? Or is that? Are we really just focusing on this matching grant program with GoFarm for now? in Hawaii.
Linus:So no, we have that as well. And what it is, is, we might reduce our requirements, or our ratio requirements, you know. We might say, Hey, your credit score doesn't have to be 700, maybe 650 when you're just starting out. You don't have to put as much down, maybe instead of percent down on a purchase, maybe 25 because you're a young farmer. Working capital, you may not need to hit the working capital ratios. Maybe if you're slightly less, that's okay because you're a young young beginning farmer. So we reduce the requirements for all young farmers, beginning small farmers, so that they have a better chance of qualifying and that we do all day long.
Jim:And so if I think about American AgCredit, I guess in my simplified version of it, right, American AgCredit is about ag and focuses on ag and understands ag, and I think that's different from traditional bank lending, Yeah?
Linus:Well, what we like to profess that a lot of our employees come from ag backgrounds. In my case, I come from a ranching background. So and I have ranched myself. So you're talking with someone that understand agriculture. A lot of the commercial banks don't have that knowledge and commercial banks turn over their employees a lot more frequently. So just as you get to kind of get your business understood by one, one manager, they switch people on you, and you've got to retrain a whole ʻnother guy. The Farm Credit System has a history of keeping employees a long time. I'm one of those examples have been around for 40 years, but we have several people in our organization that are 20 years and more, you know, just in Hawaii. So so for a lot of it, you're dealing with the same person and you get to know them, they know your operation we get out there in the field, we're just not only pushing numbers, we go out and visit the operation to get a good idea. The other thing that's unique about the Farm Credit System, and American AgCredit is we're kind of set up like a co-op. So when you became a borrower you actually put stock in our association you purchase $1,000 worth of stock. What that stock allows you to do is have a voice in the company. Now you're a stockholder. You you have the right to vote for our stockholders for our board of directors, you have the right to even run for Board of Directorship, if you so choose so. We then share our profits every year, like a co-op. So we give back patronage dividends. So we've been averaging over the last several years a 1% payback to our borrowers. So and that 1%, depend on your loan amount, could be pretty substantial. So what we like to say is, you know, really, it kind of helps you form an effective interest rate. So say, if your interest rate is is 5%, you get 1% back at the end of the year, so in actuality, your interest rate is 4%, because you're getting 1% back. And we're one of the few banks I know that actually gives back dividends at the end of the year, then being a stockholder on, you know, actually owning their stock. So that's another thing we do, we are set up like a co-op, where we share our profits with with our borrowers. Last year alone, I think we, just in the state of Hawaii, we gave back like $1 million in dividends to the farmers of Hawaii. So that's another unique thing about Farm Credit System and American AgCredit.
Jim:That's great, thanks for all the extra details, there. Insurance, equipment and vehicle loans or leases, things lines of credit, is that also in the realm of what American AgCredit will work with ag producers about?
Linus:I would say 80% of our business is probably mortgage
Jim:Excellent, thank you. And Pomai, I know GoFarm is kind of loans, you know, lending you money to buy that first property, then other than that, it's equipment loans, security regarded as one of the most successful beginning farmer loans, itʻs lines of credit, it's leasing, and also crop programs probably anywhere in the country, and is one of the insurance. We also provide crop insurance as well. So and some of those things we didn't have available to us when we are largest probably, I think you have some great resources standalone Farm Credit Services of Hawaii. Those services grown on American AgCredit. So yeah, there's, there's, I tell people, online. Like I'm thinking if people are, are concerned about I said you tell me what you need the money for, and I can find a program for it, because we service all the needs of agriculture. how do I pull together a financial statement or you know, the things, you know, balance sheets, some of the things, cash flows that that that Linus is mentioning, don't do you have an online guide book that's available for free? Am I right? Are there online resources that are available for free to anyone?
Pomai:Yes. So we have a we have an agribusiness guidebook that is free online, that kind of takes you kind of walks you through all the different areas of your agribusiness that we want you to be aware of. There are there are templates in there to kind of help you understand or demonstrate like what you're going to need. But honestly, to put a financial statement together like you, someone needs to work with you. So it's it's more about, you know, I think what we see a lot is, is, especially because we're a training program, you know, we really have to remind everyone that you're an adult learner, and you're a business owner. So it's, it's not, you know, you really have to take initiative. You really have to have that can do attitude. And that's a little bit of like a rural and cultural shift, you know, like farmers now, it's not just like, you work for a plantation manager, if you want to be a farmer, you gotta like, be the one that is in charge. So I think that also kind of building that skill sets. Where, where it's not so much where you where the mentality is not so much like, oh, well, what are you going to do for me, I'm a farmer, it's more of, I'm a farmer, and this is what I'm looking for. What do I need to do to make it happen? Like, that's the attitude and the character that we're looking for nowadays. I mean, we've just been through a pandemic, I mean, we're tre... who's surviving? And the ones that are surviving are not just the ones that are showing up and being like, What can I do? It's, it's the ones that are showing up that have ideas and, and are really willing to, to go the long haul or figure out a way, you know. In farming, I think, especially before the pandemic, everyone just got really complacent. Like we do this, we sell this we grow this, that's it. And then pandemic came and really leveled the playing field, man, so many people were destroyed. So, you know, we don't want that to happen again, but also the skills needed to look at other options or explore different ways to get support really also takes like your own, you know, your own strength and your own wherewithal, you know. We, we all have stressors, we all have financial stressors. I mean, like, especially if you work in ag, or you're in ag, you know, that's, that's, everyone's always looking at, like, where we're gonna be able to be sustainable. So, I just want to note that the can do attitude, and what you know, like really doing your part is gonna be really important when you show up, and that that's gonna really matter to us. I think, like, not only as a training program, but also like a leader in agriculture. You know, so when, and we're really hoping that when you leave our program that you have that can do attitude. So, so that is all you know, it's like, that's also what we want people to go away with. Because those are, that's the attitude that opens doors, and opportunities for you. Yeah, if you have a bad attitude, and you no can do attitude, no one's gonna want to help you, they're gonna go to the people who are like, ready to go for it, even though it's going to be hard. So I just wanted to share that. I actually had a question for Linus. I know this is your podcast though Jim, but I actually had a question for Linus about American AgCredit for for lending. Do you are you folks able to help people who are on Hawaiian Homelands or work with like, OHA or any? I mean, are you are you able to help, or do you see any cases like that, that come through American AgCredit Linus?
Linus:Yeah, we do. Anything where we have to secure real estate, I tell them. Because there's certain laws we can't we can't take a mortgage on on the real estate, the, but anything else, like say, for example, I may have a rancher who's who's who ranches on Hawaiian Homes Land, and he needs money to buy a house, or the cattle to put on the ranch land, I can finance that. If he needs equipment, I can finance that. It's anything that that that I can attach as as collateral that's not secured to the land, I can finance on those lands. It's just if I if I have to attach land that, that I can not able to help in some situations where a person maybe is looking for money to buy out another Hawaiian Homes recipient. If they have fee simple land that I can use as collateral, I can do that I can use the fee simple land as collateral and lend the money so that they can buy the Hawaiian Homes interest. So there are cases that I can help.
Jim:And some of that broke up a little Linus. So may may ask you to to repeat that, but with Hawaiian Homes, you're not able to attach the land. So you can't use that as an asset as is that what I was hearing,
Linus:I canʻt use it as collateral, I show it as an asset on their financial statement, but I can't use it as collateral to secure my loan.
Jim:So is that is that going to limit it significantly compared to other types of land?
Linus:Yeah, I mean, you know, it does. We're also, that's the same way with with Kamehameha School leases and State of Hawaii leases or leased lands that same same thing. We look at it the same way. So it does limit someone who's who's just working on that those type of properties. But it kind of is what it is, you know, and we're not the only bank, a lot of banks in Hawaii will won't touch those type of properties. And I know those are the easiest to get, you know, and the cheapest to get up front. But it's just the way some of those leases are written. It's just not a lender friendly.
Pomai:That is a question that comes up a lot for leased lands. So thank you for sharing, like what you can do, though, like what things are possible. So that's great, thank you.
Jim:But am I right in thinking Linus, that that can be offset by a strong profitability on that land that you're leasing or have access to. So that could offset it?
Linus:That would help offset it, but the main concern on those is the collateral. What we will use to secure the debt. In a lot of time that's limited. But again, like I say, if we're using a farm chattel asset, like an animal or equipment, that's fine, we can do it based on that.
Jim:Okay, that's helpful. Thank you. So it sounds like this GoFarm Hawaii American AgCredit matching grant program is helping can do ag producers so that they can do what everyone wants them to do on the island. So anything you want to share to folks that might be in interested in applying?
Linus:I would, the only thing I would say is reached out to
Jim:Pomai? GoFarms, you know, they're they're the lead on this. They will they'll walk you through it. Really great people. Take
Pomai:Yeah, again, you know, we're we're really grateful for you by your hand and and go through the process which we have thrown out some pretty good hints on what we'll be looking at, so take that into consideration. And American AgCredit, weʻre just privilidged that we can we can be of some assistance to the agricultural community. the opportunity to share and be in partnership with American AgCredit.
Jim:We would like to thank Pomai and Linus for sharing information about this exciting new matching grant program for Hawaii ag producers, and many other ways to receive financial assistance from either GoFarm or American AgCredit. In our 2022 survey of nearly 350 ag producers in Hawaii, financial issues were extremely high on their list of stressors. So we hope this information will prove helpful to many,
Pomai:I will say that I I do have a little intel that Linus might be doing a workshop at the State Agricultural conference in September. So if you need a little brush up on, on kind of like what the process would look like, I just kind of want to do that little plug because that's, you know, it's not and that is not just for GoFarmers, that is for all people in agriculture, who are looking for any type of lending. That's a big one that all the lenders see. They're always like, "Hi, can you get my guys prepared for this?" So I know that I have some intel that Linus will be doing a little a little workshopping at the Ag conference in September. So if anyone's in if anyone is interested, and or needs that kind of, you know, like a little bit more of that knowledge, I would really recommend everyone attend. And I mean, not just that session, but there'll be a lot of sessions to just really stay in the know of what is moving and shaking. There's a lot of different pieces in the agricultural realm. So that you know what's coming and you know what to be prepared for and you know, where you fit.
Jim:And that's in Hilo on the Big Island?
Pomai:It's actually going to be on Oahu, at the Hawaii Convention Center. It's put on by the Hawaii Agricultural Leadership Foundation. Um and it's on September 27, and 28th.
Jim:Great, I can put a link in the show notes. That's great to know. Thank you so much for, for taking the time to talk about what you do and how you do it and about this matching grant program which is is a great boon to the islands. So thanks so much. The intention of this podcast series is to create a safe space for respectful and inclusive dialogue. With people from across a broad and diverse spectrum involved in growing and making accessible the food we share together. A diversity of voices, perspectives and experiences can serve to deepen mutual understanding, to spark creative problem solving, and provide insight into the complexities of our agricultural system. If you our listeners have experiences with Hawaii agricultural ecosystems, from small holder farms to large even including multinational agricultural, industrial companies, or anywhere in between, and you would like to share your story, please contact us. We welcome your voices and perspectives. And thank you for listening to this Seeds of Wellbeing "Experts in the Field" podcast featuring the perspectives of service providers working to support egg producers in the Hawaiian Islands, the United States and beyond. If you have found it helpful, please follow, like and share this episode. If you have ideas about how we can make it better, please let us know in the comments or use the link on our website. Mahalo