VERSAILLES, Ky. — October is harvest time. Soon the crop will be taken to the market or a buyer and a check will come back to take care of the year’s mortgage payment, the feed or fertilizer bill and the loan for vehicles and equipment and the cycle will start again in the spring.

Many farmers have spent their entire careers living this scenario but times have changed and their small town banks are more reluctant to give up their money on the hopes of a good crop.

Michael Duckworth, senior vice president, agricultural relations officer at Citizen’s National Commerce Bank in Woodford County, has made a living out of helping farmers make a living.

An extension agent for 21 years before starting his banking career, Duckworth has a different perspective on farmers’ financial needs. He thinks the small producer certainly has a place in the agricultural picture for many years to come.

“Farmers are probably more business savvy now than 20 years ago, and they don’t mind to invest time in business planning,” said Duckworth. “Some farmers just didn’t have those skills and credit was so easy back then. Now the industry of agriculture is different and financing it is so sophisticated.”

Duckworth is located in one of the most agriculturally rich regions in Kentucky - deep in the heart of horse country.

“As you drive through our county you will encounter seven of the top 20 Thoroughbred farms in the world, but there are many more small ones, and we think those are the ones we can cater to in the future,” he said.

Duckworth said tobacco was a profitable crop, but now the key to making sure a farmer is successful is to stay with him throughout the transition.

“Tobacco was a crop that would turn a profit, but with new enterprises, we have to take addition steps and recommend a business and financial plan,” he said. “There’s something about putting a plan on paper that adds value to the customer. We spend a lot of time with them and a lot of time on the farm learning about the farmer to make those important decisions and possibly move them in a different direction if something doesn’t work.”

Kentucky’s investment in agricultural diversity has come mainly through Master Settlement Agreement Funds known as Phase I funding and has created new markets for producers. Last week the Kentucky Department of Agriculture (KDA) announced an increase in the number of Kentucky farmers’ markets and vendors.

The number of registered farmers’ markets increased 10.2 percent and the number of vendors rose 7.7 percent from 2005-06, according to the KDA report.

Janet Eaton, the KDA’s farmers’ market coordinator who wrote the report, attributed the growth to three factors: farmers looking for local outlets, customers looking for local products, and the freshness issue.

According to Eaton, another contributing factor to the growth was a 2003 bill that allows Kentuckians to produce products in their homes to sell.

“If they don’t sell their produce at the market, they can process it into value-added products with a longer shelf life,” she said. “Some of the most popular products of this legislation are jams, jellies and baked goods. That piece of legislation has probably added more income to our small farmers’ bottom lines than any one thing.” The report noted that gross sales at Kentucky farmers’ markets in 2005 totaled nearly $7 million.

Dispite fears of uncertainty after the tobacco buyout, Duckworth believes there is still a future for Kentucky’s small farms.

“I think there is still a place for the small farmer. The state is the sixth largest in the nation in farms and most of those are small farms,” he said. “For beginning farmers, it is a huge challenge but what we try to do as their bankers, is to make decisions based on the facts. We have a lot of places to go to find the credit and once we make the loan we don’t abandon those farmers; we stand with them with a lot of financial pieces until they get off the ground.”

Duckworth thinks agriculture expansion will come in different ways in the future including more equine businesses and more women getting into agriculture, but no matter the kinds of ventures, farmers will have to rely on more than just their local bankers to make those ventures successful.

“We’ll have to maximize the current available tax laws for farmers we’ll have to have teams of people to help them manage in the future” he said. “It could be best for farmers to get a good CPA and tax attorney and team up with their personal banker. We’ll have to change because the industry is changing.”

This Ohio farm news was published in the Oct. 25, 2006 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.