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CDFA Food and Agriculture Finance Update - September 8, 2020

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CDFA Food and Agriculture Finance Update
September 8, 2020
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CDFA Food & Agriculture Finance Update

Features

Farmers Increasingly Turning to Non-Traditional Lenders
A Kansas State University agricultural economist says that non-traditional lenders are becoming a bigger part of doing business in farm country. The majority of farmers use farm credit lenders and commercial banks to finance purchases of land, equipment, crop insurance, or other expenses. But there are three categories of lenders that producers are now turning to as alternatives.

Want More New Farmers on the Land? Give Landowners a Tax Break
Farmers in Minnesota rallied for more support when it comes to buying their own farmland and, in 2017, the state legislature passed the Beginning Farmer Tax Credit, which offers tax credits to landowners for the sale or lease of farmland and other assets to beginners. In 2019, Pennsylvania did the same, and now, Ohio could follow suit as farmers in Ohio are advocating for legislation that would financially incentivize landowners to pass their land to beginning farmers.

Local and Regional Farmer and Market Support Act Introduced in Congress
Congresswoman Alma Adams (D-NC-12) introduced the Act to provide meaningful support to farmers, ranchers, and critical local and regional food systems businesses. The Local Farmer Act would provide direct payments to local and regional food producers based on their historic revenue, and help their local markets as they both cope with the economic impacts of the coronavirus pandemic.

RESTAURANTS Act Gains Momentum
A bipartisan bill to aid restaurants is gaining momentum, with over 180 co-sponsors and additional endorsements announced in the past few weeks.  The bill is officially titled the Real Economic Support That Acknowledges Unique Restaurant Assistance Needed To Survive Act of 2020, but is better known as the RESTAURANTS Act of 2020 ("the Act"). The Act was introduced in the Senate and in the House of Representatives. The Act currently has 182 co-sponsors in the House.

Steps for Ag Lenders to Mitigate Climate Risk and Finance Resilience
Farmers in the U.S. are facing severe challenges including poor economic conditions, extreme weather, and disruptions from COVID-19. These risks also impact farmers' financial partners, including agricultural lenders. While some of these risks are difficult to anticipate and plan for, there are growing opportunities and resources available for farmers and their lenders to better understand their vulnerabilities related to climate change — and take steps to build resilience.

New Co-op Grocery Opens in Downtown Kansas City, KS
The Merc Co+op recently opened the doors of their new full-service grocery store in downtown Kansas City, mitigating food access challenges in the area. This $7 million project was made possible by a public-private partnership which includes property tax from the Downtown Grocery Tax Increment Financing District and New Market Tax Credits allocated by the Central Bank of Kansas City. Local Initiatives Support Corporation also provided low-cost capital to complete the financing of the project with access to Healthy Food Financing Initiative funding.

Legislation Introduced to Create New Soil Health Transition Loan Program
U.S. Representative Abigail Spanberger — Chair of the U.S. House Agriculture Committee's Subcommittee on Conservation and Forestry — announced the introduction of her legislation to establish a "Soil Health Transition Loan Program" at the U.S. Department of Agriculture (USDA) to support farmers and producers looking to start or strengthen existing conservation efforts on their farms.

Farm Credit Quality Remains Solid in Pandemic
The economic fallout from the coronavirus outbreak hasn't yet severely hindered farmers from getting or repaying loans from a major network of agricultural lenders. While the Farm Credit System's financial results for the first half of 2020 reflect continued stability in agriculture, experts say the pandemic's effects on agricultural debt may still be felt in the future.

Upcoming Events
Intro Infrastructure Finance WebCourse

CDFA // BNY Mellon Development Finance Webcast Series: Understanding The Municipal Liquidity Facility
Tuesday, September 15, 2020 - 1:00 PM Eastern
During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, finance experts will discuss the Municipal Liquidity Facility's requirements, market trends since the MLF's launch, and what can be done to make the MLF an attractive option for issuers.

CDFA Food Systems Finance Webinar Series: Financing Food Systems Entrepreneurs
Tuesday, September 29, 2020 - 2:00 PM Eastern
During this installment of the CDFA Food Systems Finance Webinar Series, development finance professionals from around the country will describe their strategies for supporting local entrepreneurs in moving their business from idea to execution.

Food & Agriculture Finance News

Wellness Business "Nourish u" Opens New Location With Help From Midwest Electric Loan
Hometown Stations | Sep. 3 | Food Systems Finance | Revolving Loan Funds (RLFs)

Penn State SBDC launching Pennsylvania Agriculture Center of Excellence
Penn State News | Sep. 3 | Agriculture Finance | Disaster Recovery & Relief | Food Systems Finance | COVID-19

How the Farmers to Families Food Box Program Is Overpaid and Underdelivered
NPR | Sep. 3 | Agriculture Finance | Disaster Recovery & Relief | Federal | Food Systems Finance | U.S. Dept. of Agriculture (USDA) | COVID-19

Wisconsin and Minnesota Fuel Movement to Get More Black Farmers on Land
Duluth News Tribune | Aug. 31 | Access to Capital | Agriculture Finance | Food Systems Finance | Revolving Loan Funds (RLFs) | Tax Credits

USDA Implements the OneRD Guarantee Loan Initiative
USDA | Aug. 31 | Access to Capital | Food Systems Finance | Infrastructure Finance | Rural Development | U.S. Dept. of Agriculture (USDA)

Iowa Governor Allocates $100M in CARES Act Funding to Support Agriculture
Iowa's News Now | Aug. 27 | Access to Capital | Agriculture Finance | Food Systems Finance

Is This the End for America's Mom and Pop Stores?
Financial Times | Aug. 27 | Access to Capital | Disaster Recovery & Relief | Food Systems Finance | Incentives | Revolving Loan Funds (RLFs) | COVID-19

Using OZs to Invest in Cold Storage Facilities
Ag Web | Aug. 26 | Food Systems Finance | Opportunity Zones | Rural Development

Iowa Allocates $100M in CARES Act Funding to Agriculture
KCCI | Aug. 25 | Agriculture Finance | Disaster Recovery & Relief | Federal | Food Systems Finance | COVID-19

Additional $1B Announced for the USDA Farmers to Families Food Box Program
USDA | Aug. 25 | Agriculture Finance | Disaster Recovery & Relief | Food Systems Finance | U.S. Dept. of Agriculture (USDA) | COVID-19

As Texas Restaurants Struggle, So Does the Food Supply Chain
The Texas Tribune | Aug. 20 | Access to Capital | Agriculture Finance | Disaster Recovery & Relief | Food Systems Finance | COVID-19

Anaerobic Digester, Urban Farm Project Secures Final Funding for $32M Campus
Waste Dive | Aug. 20 | Brownfield Financing | Food Systems Finance

Black Restaurateurs Always Had a Tough Road, Pandemic Has Made Money More Scarce
The Washington Post | Aug. 19 | Access to Capital | Disaster Recovery & Relief | Food Systems Finance | Revolving Loan Funds (RLFs) | COVID-19

Massachusetts Allocates $3.3M for Food Insecurity
Governing | Aug. 19 | Agriculture Finance | Disaster Recovery & Relief | Food Systems Finance | State Finance Program | COVID-19

New Tortilla Plant Slated for Indiana
Food Business News | Aug. 18 | Economic Development | Food Systems Finance | Tax Credits

Leveraging OZs to Build a Food Co-Op
Opportunity VA | Aug. 14 | Agriculture Finance | Food Systems Finance | Opportunity Zones

Schumer Backs $120B Restaurant Fund
Bloomberg | Aug. 14 | Access to Capital | Disaster Recovery & Relief | Food Systems Finance | Legislative | COVID-19

Michigan Racial Equity Lender Issues First RACE4Progress Loans
Grand Rapids Business Journal | Aug. 13 | Disaster Recovery & Relief | Food Systems Finance | Revolving Loan Funds (RLFs) | COVID-19

How $600B in Ag Subsidies Could Feed a More Sustainable Future
GreenBiz | Aug. 12 | Access to Capital | Agriculture Finance | Federal | Food Systems Finance

USDA to Release Coronavirus Reserve Funds, Makes More Products Eligible
Fern's Ag Insider | Aug. 11 | Agriculture Finance | Disaster Recovery & Relief | Food Systems Finance | U.S. Dept. of Agriculture (USDA) | COVID-19


CDFA Resources

Financing Resilient Agriculture
Access to Capital | Agriculture Finance | Disaster Recovery & Relief | Federal | Food Systems Finance | Revolving Loan Funds (RLFs) | Rural Development | Tribal Finance
There are several existing agricultural lender initiatives that can inform the development of lending programs or products for resilient agriculture. This report derives five key lessons from these initiatives, including the need to understand the financial benefits of and barriers to resilient agricultural practices, design loan structures and requirements that correspond with the financial characteristics of those practices, utilize loan support to launch initial products, collect data on financial and environmental performance to show results and adjust credit rating processes, and consider other forms of support farmers may need to ensure successful practice adoption.


The Council of Development Finance Agencies (CDFA) is a national association dedicated to the advancement of development finance concerns and interests. CDFA is comprised of the nation's leading and most knowledgeable members of the development finance community representing public, private and non-profit entities alike. For more information, visit www.CDFA.net or email info@cdfa.net.


Council of Development Finance Agencies
100 E. Broad Street, Suite 1200
Columbus, OH 43215
(614) 705-1300
info@cdfa.net

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