May 31, 2017
The Carrot Project, founded in Boston in 2005 by Dorothy Suput, is a non-profit organization dedicated to creating financing solutions for small- and midsized farms in New England and New York.
The Carrot Project, founded in Boston in 2005 by Dorothy Suput, is a non-profit organization dedicated to creating financing solutions for small- and midsized farms in New England and New York. The Carrot Project was established as a response to the lack of access to capital for small farmers and farm businesses. Prior to founding The Carrot Project, Suput spent fifteen years in the field of sustainable agriculture and related policy work. During this time, she noticed that there was a limited focus on business development for small farms, and that in the Northeast people generally did not view ‘a farm as a business.’ This differed from the approach to agriculture in Suput’s native Indiana, as well as in Switzerland, where she had lived for a number of years while working as a biologist. The contrast in terms of sustainability and how communities think about farming guides the direction and focus of The Carrot Project.
The Carrot Project works with farms throughout New England and the Hudson Valley. These areas were chosen as a result of a research project titled “Northeast Agriculture in a Financing Fix.” Suput and a research advisory board surveyed over 700 farmers in New England and New York, conducted focus groups’, and a pilot investment with a farmer in Maine. The purpose of the research project was to try and understand the dynamics of the farmer/lender relationship. Farmers felt that access to capital was an issue, as lenders did not seem open to extending loans to small, possibly organic, farms. On the other side, lenders felt that these small farmers were not writing good business plans. Suput and the Research Advisory Board wanted to figure out the reason for this divide. The research revealed that it was not the business plans that caused trepidation among the lenders, but rather the newer non-traditional business models. The banks were not sure what to make of a Maine farmer that did not grow blueberries or potatoes, or a Pioneer Valley Farmer that did not grow tobacco. Suput realized that both parties were talking around each other and established The Carrot Project, to bring together farmers and lenders in a mutually beneficial relationship.
The first Carrot Project programs started in Western Massachusetts and Vermont with the support of Chittenden Bank in Vermont, now Peoples’ United Bank (PUB). PUB was willing to work with The Carrot Project and put together a loan program along with a Vermont non-profit, the Strolling of the Heifers. What The Carrot Project found as they started making loans was that many farms were not “investment ready,” not because they were bad farmers, but because they had often never run their own business. They did not have business skills and experience, so The Carrot Project made it their mission to help them in this regard.
The Carrot Project also noticed a significant difference between the loan applications of Vermont farmers and Massachusetts farmers. Almost without exception, the Vermont farmers’ applications were ready to be submitted to the loan review committee upon receipt, while the applications from Massachusetts farmers were not ready for the investment and lending phase. The Carrot Project discovered the reason for this is that Vermont invests heavily in business planning and management classes, business courses and general courses on the running of a farm as business. The teaching was not limited to the classroom; online classes and one-on-one sessions were also available, as well as specialization depending on the type of farm (organic, conventional etc.). The system in Vermont has in depth, which contrasted with that of Massachusetts. While Massachusetts has good resources, classes are more spread out geographically and, along with one-on-one business assistance, not as consistently available, which resulted in a very different level of business knowledge between the farmers in the two states.
This underscored the importance of educational resources and tools for farmers, and led The Carrot Project to create a robust ‘Farmer Resources’ section on their website. Users can find information on webinars that cover such topics as Financial Calendars and QuickBooks, as well as workshops, case studies, technical assistance, information on grants, lenders and cooperatives, as well as other business, financial and legal resources. The Carrot Project recognized the need to distill the essential elements of running a business and make them easy to access for farmers. The Carrot Project realized early on that it was not just about lending money to small farmers, but also about developing their management and business skills.
The Carrot project works with partner organizations to reach and support farmers. In 2012, they undertook a three year research project called Measuring Profitability and Success, which analyzed the results of providing two years of access to capital and business technical assistance. The research found that this window of time is important for the success of a farm as it often takes more than one season to see change. By the second year of the program, it was possible to see positive trends in terms of income, profitability and employment, and progress towards stated business goals. It also found that financial management skills were critical to a farm reaching its goals.
The Carrot Project believes in the importance of providing farmers with a basic level of financial and business training. Over time, they are hoping to conduct more financial management trainings with follow up one-on-one technical assistance to provide a foundational level of education. The trainings and technical assistance are the services most highly in demand at The Carrot Project.
The Carrot project estimates that their work has reached thousands of people. In addition to working with “land” farmers, they have also worked with a small number of fisheries and foresters.
One of the aspects of The Carrot Project’s work that Suput enjoys most is the ability to see client businesses thrive and grow, to see people that were not confident in their abilities gain the skills needed to realize their dream, whatever their dream may be. One of the challenges of the work is that The Carrot Project’s goal is to make systemic changes to the food system, while helping others to understand why economic farm viability is important. Suput is trying to help people recognize that farming is not always as romantic as it sounds, and that business management is an important part of success.
The Carrot Project advises anyone that would like to start a farm to do their homework, think about their ultimate goal, and realize that to care about finances is integral, because healthy finances allow a person to do what they love sustainably and for the long term.
Suput is quick to point out that The Carrot Project works with and relies on the interconnectedness of other likeminded and complimentary organizations such as Hudson Valley AgriBusiness Development Corporation (HVADC), Glynwood and Stone Barns. These connections allow The Carrot Project to have a wider reach and to continue to support farmers in their quest for resiliency and growth.