Beginning farmers in Skagit County are said to be getting a much-needed boost from a new program that has Washington State University Extension partnering with nonprofit Slow Money NW, Viva Farms, North Coast Credit Union, and food-minded investors in the region. The project is intended to help new farmers surmount one of the major hurdles producers face: the start-up costs involved in agricultural enterprises.

Slow Money NW's program, called the Farmer Reserve Fund, is extending credit services to beginning farmers by helping North Coast Credit Union use its existing resources. The nonprofit project made its first loan with NCCU in mid-July to strawberry farmer Santiago Lozano. Later in the month, a second loan was made to vegetable producer Nelida Martinez. The loans enable new farmers to purchase equipment and supplies and then repay the loan within a year.

Viva Farms is a Skagit County-based program with a mission of launching the next generation of sustainable farmers. The Viva Farms Incubator Program was launched in June 2009 to provide new farmers affordable access to education, training, and technical assistance; capital and credit; land; and markets.

Slow Money NW, a project of the nonprofit Grow Food, worked to identify the niche between available funds and financial services in the region with the needs of emerging local food and farm businesses.

"We wanted to find a model that kept our overhead down and that also utilized the existing resources in the farming community," says Japhet Koteen, Slow Money NW's project manager.

Koteen says North Coast is a good partner since it has deposits available to lend but didn't have many low-risk alternatives.

Terry Belcoe, president of NCCU, concurs that it's a good fit.

"We've got all the systems and expertise in place to do the lending," Belcoe says. "What we lacked was the knowledge of and connections with this new market of potential borrowing members. Slow Money NW and Viva Farms had all the pieces that we were lacking."

Charitable donations from two local investors were used to establish a reserve fund at NCCU to reduce risk for the credit union while making use of some of its existing deposits. Viva Farms provides an additional layer of due diligence for the fund by screening the student-farmer pool for the best potential financing candidates. The farmers also receive technical and entrepreneurial assistance from WSU Extension's Cultivating Success program.

"It is very difficult for new growers to access credit," says Lozano. "I will reserve some of my line of credit to cover any emergencies that come up. The rest I will use to pay my harvest crew before I get paid for sales."