Corporation gives farmers greater economic power

ON THE FARM

April 23, 2006|By TED SHELSBY

Some of the same economic development tools that sparked the creation of the B&O Railroad in 1827 and hundreds of other Maryland companies over the years soon will be available to farmers for the first time.

In 2004, the General Assembly created the Maryland Agricultural & Resource-Based Industry Development Corp., a quasi-public economic development organization designed to help farmers and agricultural and other rural businesses.

And during this year's recently ended legislative session, lawmakers approved the first round of funding for the organization, commonly referred to as MARBIDCO.

"We hope to become operational in September," said Stephen R. McHenry, executive director of the Rural Maryland Council, an independent state agency that works to improve the quality of life in rural regions. He is also interim director of MARBIDCO.

He said the organization received $1 million in funding for fiscal 2007, which begins July 1.

In fiscal 2008, the figure jumps to $3 million. Another $3.5 million has been approved for the following year and $4 million for 2010.

Each successive year, through 2020, the organization is scheduled to receive $4 million, McHenry said, for a total of just more than $50 million.

"That is about what we will need to become self-sufficient, to do our work and to pay our bills," he said. "We think long term that MARBIDCO will become a one-stop shop for farmers looking for financing or help with business plans. It will be a central depository for information, but it is not going to happen overnight."

MARBIDCO's vision is to help farmers, as well as people working in the forestry and seafood industries, obtain the development assistance they need to survive and thrive.

Eventually, the organization plans to provide a range of services to rural enterprises, including:

Business planning and technical assistance.

Development of new markets.

Assistance in finding capital and credit, especially for value-added activities, such as a dairy farm's move into the production of ice cream.

Helping young farmers acquire farmland.

The organization will provide grants and low-interest loans to farmers. The grants are to be used to help farmers develop business plans, and the loans will help them implement their plans.

A financing fund will help established agribusinesses with low-interest loans or loan guarantees to modernize or expand operations.

Working with commercial lenders and state land conservation programs, a Next Generation Farmland Acquisition Program will help qualified young farmers purchase farms.

"We plan to work with commercial lenders to help qualified young farmers bring the dollars to the table to help buy farmland," said McHenry.

He said MARBIDCO would work with the Maryland Agricultural Land Preservation Foundation in an arrangement by which MARBIDCO would pay young farmers seeking to purchase land 70 percent of the value of the land if the farmer puts the land in a preservation program.

McHenry said the money paid for the easement on the farm would give the farmer equity to help buy the land and provide the commercial lender assurance that the loan would be repaid.

J. Robert Frazee, president of MidAtlantic Farm Credit, a Westminster-based cooperative bank that is the state's largest agricultural lender, commended the funding for MARBIDCO.

He said agriculture needs the kinds of economic development programs that the state has been using for years to assist other industries, including technology companies.

"In most cases, economic incentives are used for job creation. But in agriculture, they could be used to help farmers become more viable," he said. "It could help farmers in Southern Maryland transition from tobacco to some other farm venture."

Lewis R. Riley, Maryland agriculture secretary, said that if the program helps young farmers obtain land, it will help solve one of the critical problems in agriculture.

Maryland has the sixth-most-expensive farmland in the country, according to the U.S. Department of Agriculture. Fueled by the red-hot market for development, the average price of an acre of Maryland farmland, including buildings, rose 38.6 percent in 2004 to $7,900.

Riley has said that the high price of farmland in Maryland makes it nearly impossible for young people who want to go into farming to buy land.

Maryland is no leader when it comes to providing farmers with incentives to enhance their operations. S. Patrick McMillan, assistant agriculture secretary, guessed that about 25 other states have economic development plans to help farmers.

"States have been helping other industries for a long, long time," he said. "Now they are beginning to help the farm industry."

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