John Hamilton

Cash crop: The right financing can fertilize food systems

By John Hamilton

If a farmer needs financing to add value, or to make it possible to go to scale based on a well-thought-out strategy, he or she shouldn't be dissuaded by fear of debt.


A recent CNBC report, Trouble on the farm, described the high level of debt experienced by commodity farmers in the U.S. and left me wondering whether their experience is mirrored here in New Hampshire.

My sense is that many New Hampshire farms are diversified, and many farmers debt-averse.

An important question to ask in this discussion is why a farm is raising additional capital. If the farmer is borrowing to pay regular ongoing operating bills and the financing term is going to extend beyond one season, that's a real red flag.

On the other hand, if a farmer needs financing to add value, or to make it possible to go to scale based on a well-thought-out strategy, he or she shouldn't be dissuaded by fear of debt.

With consumers in New Hampshire and beyond clamoring for local food, lenders need to figure out how to help farmers increase production.

Debt is neither all bad nor all good. The key is to use it appropriately. Deployed well, it can help sow a healthy food system.

John Hamilton is the Community Loan Fund's Vice President of Economic Opportunity and Vested for Growth's Managing Director.