Farm Business Incubator Toolkit GuideALBA advances economic viability, social equity and ecological land management among limited-resource and aspiring farmers.

Agriculture and Land-Based Training Association (ALBA) Salinas, California

Introduction - Farm Business Incubator

ALBA provides educational and business opportunities for farm workers and other aspiring farmers to grow and sell crops grown on two organic farms in Monterey County, California.

The programs operated by ALBA today are rooted in 40 years’ experience blending education and community development. The farm business incubator strategy shaped by ALBA and its predecessors generates measurable economic impacts and has long served as a model for programs aspiring to develop similar program models nationwide.

This toolkit provides aspiring land-based incubators with model documents and processes for the sustained management of the nonprofit model.

ALBA’s educational programs are supported by a wide variety of public and private funding sources seeking to advance education among low-income communities. With education and development, people earn the ability to lease land in the farm business incubator.

ALBA Organics is an earned-income social enterprise that buys fresh produce from farmers and farmer-graduates of the business incubator. Its sales have grown consistently over the years, totaling more than $3.4 million in 2011.

Farm Business Incubator – General Considerations

Since ALBA was founded in 2011, its management of the organization has evolved considerably. The primary topics addressed to sustain training and services include:

Training Curriculum – The Farm Education Program (PEPA) is a 12-month program starting in October with more than 400 hours of classroom and field experience for 25 students. Its Farmer Resource Guides in both English and Spanish are available at www.start2farm.gov

Leases – ALBA provides individual cash leases, payable in two installments, most often with a one-year term with limited exceptions (conservation program enrollment or multi-year field trials). Model land leases and attachments are included in this toolkit.

Equipment / Irrigation Sharing – Fee structures established by charging farmers by time with grace period for safety (for equipment) or volume (for groundwater pumping / irrigation)

Farmer Policies – Common understanding of expectations and organizational policies is vital. Grievance procedure was developed in order to assure clear processes for settling disputes.

Infrastructure – Especially important to ALBA’s model is an ability to provide post-harvest cooling and storage for fresh produce.

Program Evaluation – The viability of the program requires an ability to demonstrate economic and other impacts annually.

Farm Business Incubator Structure and Costs

Nonprofit 501(3) Structure – Rural Development Center land purchased in 1972. Triple M Ranch obtained in 2001 with conservation easement reducing purchase value more than 60%.

Assets total $5.9 million

Cost Center Analysis

Three primary costs structures are used to track financials for the organization. Expenses budgets by cost center in 2012 include:

1) Education and Training - $725,000 (income primarily grants and contracts)

2) Incubator Facilities / Land Management - $212,000 (income from land rent, water and equipment fees and depreciation)

3) ALBA Organics - $4,885,805 ($3.9 million of which is Costs of Goods Sold: fresh produce purchased from farmers)

ALBA’s Farm Business Incubation Cycles - 2012

1) Farmer Education Program (PEPA) – 300+ hours / October-May

ALBA supports an annual training cycle that includes Marketing; Business Planning; Crop Planning; Soils and Irrigation Management, Pest, Disease and Weed Management and Food Safety.

2) PEPA Phase II – Field Experience – 120+ hours / June-October

This phase was added in 2012 in order to better prepare farmers the responsibilities of holding a land lease.

3) Farm Business Incubator – from 30-100% of market rate over 5 years

Proven ability to operate with good time management and crop care is required for entry into the incubator with a land lease, currently based on market rate of $1,820/acre/year.

4) Business Plan Update – required for lease renewal – October-November

Lease holders seeking renewal are required to update an annual business plan that demonstrates the ability to measure results, establish targets for growth, and demonstrate a cogent management plan to realize success.

5) Farmer Survey Interviews – In-depth assessment of prior year – January-February

60+question survey is conducted annually with lease holders, each of whom agrees to cooperate with the process as a term of the land lease. Farm incubator graduates are also asked to participate in the confidential survey.

Land AllocationRural Development Center – 89 acres / 29 farmers in 2012

The process of allocating parcels must allow for acreage growth by continuing farmers.

Land AllocationTriple M Ranch – 55 acres dry year-round / 6 farmers in 2012

The farm is a model for good practices adjacent to sensitive riparian habitat.

ALBA OrganicsIs a licensed produce distributor serving as a market option for graduates – 75% of itssupply comes from ALBA farmers or incubator graduates now operating elsewhere.

Sales growth has been very strong:Fiscal year ending 9/30/2010: $2,068,681Fiscal year ending 9/30/2011: $3,418,000

65% increase following two years of 30%+ sales growth

2003 2004 2005 2006 2007 2008 2009 2010 2011 -

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

3,500,000

4,000,000

ALBA Organics Sales 2003-2011

Years

Gro

ss S

ales

Currently ALBA operates as a project of ALBA.

ALBA Program Indicator Topics

• Target Groups (demographics and baseline data)

• Program Scale (numbers served)

• Farmer Education Program (student evaluation)

• Farmer Technical Assistance (volume, topics, time)

• Workshops and Field Days (continuing education hours earned)

• Business Financing (loans and other types of capital)

• Farm Business Incubation (years in/out of incubator)

• Economic and Community Outcomes (sales, income, jobs, business, etc)

ALBA Program Data and Document Map

The toolkit documents are organized with a data map that tracks the participant experiences and outcomes in the program. Each step it outlined below, with the corresponding document number/name from the toolkit:

Farmer Education Program (PEPA) Enrollment

1 – ALBA Application Form

1.5 – ALBA Supplemental Intake Form

Review Applicant Qualifications

Vocation, income, and experience.

1 – ALBA Application Form

Program Orientation and Matriculation

Clarify expectations, timeline and process for enrollment.

2 – Demographic Tracking Form

Program Enrollment

Verify readiness and commitment by students.

Establish fee payment schedule with each enrollee.

3 – Program Fee Payment Form

4 – Referral Form - Hartnell College

ALBA thanks and credits Marian Doub of Friedman Associates for her data mapping work with ALBA. Learn more at www.friedmanassociates.net

ALBA Program Data and Document Map (continued)

Farmer Education Program to accessing land in the Farm Business Incubator Program

Farmer Education ProgramTopics: Marketing, Crop Plans, Business Plans, Soils and Irrigation, Pest Mgt, and Food Safety

n/a – Module Evaluation Forms

5 – Business Plan Template

Review Qualifications for Entry into Incubator

Track and verify performance in Farmer Education Program. Review student business plan and land request.

6 – Land Request Form

Entry into the Farm Business Incubator

Clarify lease responsibilities and farmer policies.

n/a – Workshop Attendance Forms

7 – Land Lease and Attachments (Items 7.1 - 7.8)

8 – Technical Assistance (TA) Form*

Incubator Advancement (annual cycles)Review farmer performance as per lease terms and annual farmer survey.

5 – Business Plan Template

6 – Land Request Form

8 – TA Tracking

9 – Annual Farmer Survey Interview

* The Technical Assistance Form has been replaced by use of a Customer Relationship Management (CRM) database donated by www.salesforce.com where ALBA tracks actions with farmers by Name, Subject, Hours, Date, and Outcomes.

ALBA Program Data and Document Map (continued)

From annual lease updates in the Farm Business Incubator Program to graduating out of the program.

Incubator Advancement

(Years 3 - 5)

Includes all previous forms plus an annual process of helping the farmer clarify long-term plans by using the

9 – Farm Transition Assessment

Access to Land After Graduation from the Incubator

8 - Annual Farmer Survey Interview

With this data tracking system, ALBA is able to capture and tabulate program impacts as summarized in the following slides:

Target Groups (demographics and baseline data)

1. Gender

2. Race - Hispanic/Latino

3. Age

4. Location – City/County

5. HHS Poverty Levels

6. HUD - Area Median Income

7. Business status at entry

Program Scale (numbers served)

1. Inquiries

2. Participants

3. Clients Served

4. New Clients Served

5. Assisted businesses (unduplicated)

6. New incubator tenants

7. Active Incubator tenants  

Farmer Education Program Performance (student evaluation)

1. Enrollees

2. Attendance Records

3. Graduates

4. Farm business plans / presentations  

Technical Assistance(volume, topics, time per farmer)

1. # TA Recipients (unduplicated)

2. # of TA Hours

3. Average Hours per Farmer

4. Priority Topics

Business Financing(loans and other types)

1. Business Financing & Type  Loan Ind Dev Acct Other

2. Financing source

3. Applications submitted and approved

4. Success rate (%)

5. Financing Amount Rec'd

Farm Business Incubation(land contracts / farmer performance

by year in incubator)

1. Number of new and active tenants

2. Number of tenants (by year in incubator)

3. Average tenancy length (years)

Rural Development Center    Triple M Ranch

Economic and Community Outcomes(income, business growth, jobs, wealth)

1. Business plans completed or updated

2. Number of jobs created and retained

3. Number of clients exercising philanthropy

 

Economic and Community Outcomes (continued)

4. Household Income by Year as Farmer

5. Clients Leaving Poverty

6. Wealth / Asset Creation – analyze balance sheet

7. Long-term Access to Land – lease or purchase

Next Steps

update annual survey interview

maintain vigilance on data integrity

partner with farmers to act on results

Agriculture and Land-Based Training Association (ALBA)PO Box 6264; Salinas, CA 93912

www.albafarmers.org (831) 758-1469

This project is supported by the Beginning Farmer and Rancher Development Program of the USDA National Institute

of Food and Agriculture, Grant #2009-49400-06025.