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Women taking a larger role in farm's finances

Ohio Correspondent

GRAND RAPIDS, Ohio — Women’s involvement in agriculture finance is changing - and for the better - according to Carolyn Cooksie of the Farm Service Agency in Washington D.C.

“Women are becoming more savvy,” said Cooksie, deputy administrator of the national FSA farm loan program. She spoke last week at the Women in Agriculture conference at Wood County’s Nazareth Hall.

In past years, she said women would go with their husbands and sign whatever he and the lender said they should sign.

But she cautioned women to be careful.

“Debt now, especially with the federal government, follows you to your grave,” Cooksie said. “Women need to know what they’re signing.”

She gave examples of young women who are divorced from their husbands, but still owe money on a loan for a farm they are no longer involved in.

“She’s not divorced from the note and debt she signed,” Cooksie said.

Another change Cooksie noted is an increase in the number of women who becoming the main farm operators.

Whether on their own or part of a farming couple, she said women need to understand business finances and keep good records. “If you don’t think of it as a business, you’re going to fail,” she said.

Because most farms need credit to operate, she said records are needed to convince lenders.

“Understand your cash flow. Understand what the bottom line is,” Cooksie said. “Understand your repayment capacity.”

Cooksie gave 12 points of advice to women who want to apply for loans.

•Provide the lender with an accurate income statement and balance sheet.

•Project cash flow for the business for a least a year - or longer.

•Maintain a good set of farm business records and use them to
make management decisions.

•Approach a lender in a businesslike manner with a business plan.

•Arrange credit in advance of major purchases.

•Have a repayment program developed.

•Give the lender time to review the plan and make suggestions -
but not too much time.

•Maintain good communication with the lender such as asking questions as they arise.

•Avoid split lines of credit if possible by staying with one lender.

•Practice good production and financial management at all times.

•Do everything possible to build understanding and trust with your lender.

•Set long-range goals for the business and for the family and develop a plan for reaching them

•Cooksie said FSA is a good place for beginning farmers to get the financial help they need, but there are other lenders who also may help.

She noted FSA has funds targeted to women. “If you’re a woman you’re sitting in pretty good shape for farming,” she said.
The details of those programs were provided earlier in the day by Holly Gates, farm loan manager in the Farm Service Agency’s Tiffin office. She explained federal farm loan programs that can provide money for owner-operators.

“We aren’t making loans to landlords or absentee farmers,” said Gates, who is in charge of the program in six northwest Ohio counties. She said there are several types of loans that go through her office.

Loans can be made directly to farmers or they can go through another lender.

“A direct loan basically means you come to us and the entire loan comes from us,” she said. Guaranteed loans, however, can make additional money available when commercial lenders can’t loan the entire amount of farmer requests.

In addition, she said loans to beginning farmers can be made to people who have been farming less than 10 years.

“Age has nothing to do with this,” Gates said. “How many years have you filed a schedule F with your (federal income) taxes?

That’s a good indication.”

Gates said much of the business in her office is with beginning farmers who don’t qualify for financing at a commercial lender. “It gets them to the point where they can afford that land,” she said.

“It has been an excellent program for a lot of beginning farmers in our area.”

Although loans are written for longer periods with low interest, they are reviewed regularly and are subject to “graduation” to a traditional lender as soon as they qualify. “As soon as they get to the point where they afford conventional credit, they have to change,” she said, so money becomes available to other farmers who need it.

Another loan program through FSA is targeted to minorities and women. “Money is set aside for those persons who are socially disadvantaged,” she said. “That’s going to come out of a different pot.”

Women can qualify for loans if they are one of the principal operators of the farm. “If I see she’s as actively involved in farming as he is, she’ll qualify,” Gates said.

Youth loans is another helpful area from FSA, she said. Young people ages 10-20 - which may change to ages 9-21 - who are involved in 4-H or FFA projects may qualify for loans of up to $5,000. She said it helps build credit for young people and teaches them the basics of business.

No matter what kind of loan they are seeking, Gates said she sees a more businesslike approach to farming than there has been in the past. And almost all farm families have at least one off-farm job. “It’s a lot different that a family farm 50 years ago,” she said.

“But that’s the way it is today - at least in northwest Ohio.”

This farm news was published in the March 28, 2007 issue of Farm World, serving Indiana, Ohio, Illinois, Kentucky, Michigan and Tennessee.