Category: Agricultural Entrepreneurs

Hannah Esch | Entrepreneur of the Month | May 2020

By: Sarah Phillips

I have the pleasure of introducing Hannah Esch as May’s Entrepreneur of the Month. Hannah is the founder of Oak Barn Beef, a farm-to-table beef subscription service that sells beef it purchases from her family’s ranch in Nebraska. Hannah started Oak Barn Beef, a one-stop online source where consumers can purchase quality beef, as a college student.

finding your “why”

Growing up on 8 acres in Colorado, Hannah became involved in FFA and 4-H at a young age, and it was in those programs that she first developed her passion for agriculture. At age 13, Hannah and her family moved to their current ranch in Nebraska. Hannah credits her ag-focused community and her family (who has been farming for 5 generations!) for helping foster her passion for hard work and agriculture.

For Hannah, the moment she heard a child in the grocery store say “eggs come from cow because they are next to the milk in the grocery store,” she knew she had to do something to bridge the gap between consumers and their food. At that time, Hannah was a sophomore Animal Science major at the University of Nebraska-Lincoln and was serving as the Nebraska Beef Ambassador. Hannah really enjoyed school and interacting with consumers, but was not quite sure how all of that fit into her career aspirations. But when she heard that child’s statement, she knew she had found her “why.” Knowing why she has started her business, and always focusing on what she hopes to accomplish, has kept her motivated, even with a busy college schedule.

focus on the problem first, then develop the solution

Hannah credits Oak Barn Beef’s success to her commitment to thinking about the problem first and then shifting her focus to developing solutions.

“If you are thinking about solutions first, how can you really be sure you are providing a product or service that solves a real customer’s problem?”

It was when Hannah recognized that there was a gap between consumers and food producers—the problem— she was able to focus on developing solutions for educating consumers on where their food comes from, starting at the farm and ending at the dinner table.

the best time to start a business

Even though it might seem challenging to start a business as a college student, Hannah states that college is the best time to start a business. She explains that there are so many great (and often free or discounted) resources available to college students to help kickstart their businesses. For example, Hannah is part of the Engler Agribusiness Entrepreneurship Program where she has access to mentors, resources, and support from her fellow entrepreneurs. This entrepreneurship program is open to all University of Nebraska-Lincoln students who want to start their businesses now. The program has allowed Hannah and her peers in the program to bounce ideas off each other, learn by actually doing, develop her business plan or operating documents, and find support within a community of other entrepreneurs who also are trying to start a business while in college.

just get started

Hannah knew that if she waited for everything to be perfect, she would never get started on her business. This is one piece of advice Hannah gives during her presentations and conversations with other entrepreneurs – don’t be afraid to take a risk and just get started; if you wait until the perfect moment, you’ll be waiting forever! For Hannah, this meant not letting the fear of being young, or the heavy workload that comes with being an animal science major, stop her from pursuing her business goals.

In addition to just going for it, mentorship has also been an extremely beneficial tool in growing her business. In the Summer of 2018, Hannah took a big leap of faith and emailed Five Marys Farm, a ranch in Fort Jones, California, and asked for an internship. As a result, Hannah got to learn from a working ranch and developed a relationship with other female entrepreneurs. Hannah says that she has found the benefit of having mentors to be that you have someone in your life who can reflect on your experiences with you. A mentor can also provide guidance and assistance along the way. Those always evolving and growing mentorships have helped Hannah grow her company into what it is today.

use your resources wisely

Hannah also recommends that young entrepreneurs take advantage of podcasts and audibles for free guidance on starting your business. Hannah frequently listens to the “Goal Digger” podcast by Jenna Kutcher which has provided her with practical advice and inspiration when it comes to seeing her business succeed.

Additionally, Hannah has taken advantage of using tools she is familiar with—Facebook and Instagram—to market her product at a low cost. Hannah also knew that telling her story would be important for connecting with consumers. Posting pictures and sharing stories via social media has allowed her customers to get to know her and her family, and ultimately helped consumers trust her to produce their food. For young entrepreneurs, letting your customers get to know you and providing insight into the business allows them to feel confident in both you and your process; this trust has been critical in getting and retaining customers within Hannah’s company.

meaningful moments

Although starting, managing, and running your own business can be challenging, the little meaningful moments that happen along the way make it all worth it for Hannah. Oak Barn Beef is a team effort between Hannah and her family. The ability to work together as a family and achieve a common goal is something that Hannah really appreciates about her business.

When asked about some of her favorite moments with Oak Barn Beef, Hannah immediately said “seeing all the orders come in.”

For Hannah, seeing orders come in means that customers trust her to raise and produce their food; that is the victory for her.

Hannah considers it a great honor to provide food for her customers, and every time she sees an order, it reminds her that she is capable and that her story is resonating with others.

To wrap up our conversation, I asked Hannah what the last piece of advice she would offer to other college students or young entrepreneurs who are just starting out in their careers. Hannah replied, “Be patient and make time to take care of yourself.” It’s so easy to want to accomplish everything at once, but starting a business is a journey that takes time. Focus on accomplishing the little things every day, and before long, you will be surprised at just how far you and your business will have grown.

You can learn more about Hannah, her family, and Oak Barn Beef by following her story on Instagram and Facebook.

Sarah Phillips, at the time of this blog post, is a third-year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as an Honor Code Representative and a Law Lion Ambassador. Sarah is the Editor-in-Chief of the Dickinson Law Review.

Covid-19 Paycheck Protection Program: Relief for Small Businesses & the Self-Employed During a Global Pandemic

By: Sarah Phillips

The COVID-19 pandemic has changed daily life for everyone, and as a result, small business owners have been forced to shut down or significantly change their operations. Adding more stress to the already emotional situation is the flood of information from all sources, often leaving small business owners overwhelmed at the thought of moving forward. Luckily, relief programs are finally starting to take effect, and many programs are designed for helping small businesses survive.

If you are a small business owner, self-employed, or a sole proprietor, chances are you have heard about the new Paycheck Protection Program (PPP) administered by the U.S. Small Business Administration (SBA). This program aims to help small businesses or self-employed individuals keep their dedicated employees (and themselves) on payroll by administering loans with extremely favorable terms. The following guidelines should help you determine if you qualify, how much assistance you can receive, and clarify the program requirements. Note that the loan application process is now open to all applicable individuals and businesses, so it is better to get started sooner rather than later—the deadline to apply is June 30th, 2020. Also note that there is currently a backlog at most financial institutions and the SBA so that is another reason to get your application filed as soon as possible!

terms of the loan

For a small business owner to receive a loan, no collateral or guarantor is required. The loans will have a 1% fixed rate, payments are deferred for six months (interest will accrue), and full payment will be due in two years. However, the benefit of these loans is that if you and your business meet the requirements listed below, the loan could be entirely forgiven by the government. The loan can be used to cover payroll and other costs associated with keeping your employees employed, including:

· Salaries and Wages (capped at $100,000 per year per person)

· Benefits (vacation time, sick leave, parental or family leave)

· Health Care and Retirement Benefits

· State and Local Tax Costs

· Mortgage Interest, Rent Payments, and Utility Expenses (only up to 25% of the funds you receive can be used for this category of expenses). The application calls these “Non-Payroll Costs.”

Eligible businesses or individuals can receive up to 2.5 times their average monthly payroll expenses! Funds received in excess of the estimated payroll costs can be used to pay non-payroll costs, but remember only a maximum of 25% of the funds received can be used for non-payroll costs. If you are going to use any funds for mortgage interest, rent payments, or utility expenses, those services or agreements must have been in place before February 15, 2020.

If you are self-employed, rather than using the funds to pay employees, you are using the funds to pay yourself. Your loan amount would be used to help you continue covering your living expenses, and can assist in making payments on business utilities or rent/mortgage payments.

Does my business qualify?

The following individuals and small businesses qualify for relief under the program:

· Small Businesses and Nonprofits with 500 or fewer employees (Including Agricultural Operations);

· Independent Contractors;

· Sole Proprietors; and

· Self-Employed Individuals.

Additionally, the business must have been in operation before February 15, 2020. Updated SBA guidelines also indicate that hotels and food service businesses that are (1) franchises and (2) have more than 500 employees can still apply for relief under the program.

repayment terms

Here’s the best part about the PPP—if all employees are kept on the payroll for at least eight weeks after receipt of the funds, and the funds are used for the costs outlined above, the entire loan (principal and interest) will be forgiven.

You will need to submit the appropriate paperwork with your lender to finalize the process. It is also important to maintain documentation of how you use the funds; evidence of proper use of the money is essential in order for the loan to be forgiven. Finally, an added perk of the PPP is that any forgiven funds are not counted as taxable income in this tax year. Given this, it is very advantageous that any business owner or self-employed individual who receives funds makes sure that they follow all the necessary steps to have the full amount forgiven.

how do I apply?

Before you begin to fill out an application, you should gather the following documentation for your business:

· A list of any owner who holds a 20% or greater stake in the company (Each 20% or greater owner will need to sign off on the application);

· Mortgage or Rent Statements for the last 12 months;

· Utility Bills from the last 12 months;

· An Updated Profit/Loss Statement or your 2019 Tax Filings; and,

· An accurate list of all current employees who live in the United States and their salaries.

Once you have the necessary documentation and information, you should begin to work through the application. First, you should download the application here. You will need to start by filling in basic information about your business – address, phone number, EIN (or your Social Security Number if you do not have an EIN) in the top portion of the application on page 1.

The most important part is your average monthly payroll cost or, if you are self-employed, your average monthly profit. This number goes in the box titled “Average Monthly Payroll” in the top portion of the first page. You will multiply this number by 2.5 (in the next box) so that the reviewer of your application can determine the loan amount you should get.

For a business that needs to use the average monthly payroll amount, look back at your previous payroll costs. You should use the numbers for the past 12 months, or the number you included on your 2019 Tax Forms if you already filed them.

If you are self-employed, you will need to know your Annual Income, which you can find by referencing your books for tax year 2019. You will take your annual number (for an entire 12-month period) and divide it by 12. That will give you your monthly income, which ideally should represent your “salary.” Like with a small business, multiple your monthly number by 2.5, and this figure will help the reviewer determine your loan amount.

The remainder of the application asks “Yes” or “No” questions about your business. It may be helpful to watch this step-by-step video tutorial as you work through the application process. Self-employed individuals may want to watch this video tutorial about the PPP for application considerations specific to being self-employed.

When finished, your application will need to be submitted through one of the several approved SBA lenders. You can find your local SBA approved lender here. Fortune reports that Paypal is now offering these loans as well.

final considerations

There are 349 billion dollars available for funding through this program, but you should work to get your application in as quickly as possible since they are approved on a first-come, first-serve basis. Remember, you cannot apply for more than one PPP loan, so it is important to fill out the application accurately and completely in order to receive your maximum amount of funds. You should also continue to monitor the SBA website for updates and announcements regarding additional relief programs available to small businesses.

See the Important Sources section for additional links that may aid in the application process.

Sarah Phillips, at the time of this blog post, is a third-year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as an Honor Code Representative and a Law Lion Ambassador. Sarah is the Editor-in-Chief of the Dickinson Law Review.

 

Important Sources:

To access the PPP application, click here

For a video tutorial on how to apply, click here

For a video specifically regarding self-employed individuals, click here

For more information on SBA’s relief programs, click here

References:

https://www.agcountry.com/News/2020/April/sba-paycheck-protection-program

https://www.kabbage.com/paycheck-protection-program-loans/

https://quickbooks.intuit.com/learn-support/en-us/help-articles/how-to-apply-to-the-paycheck-protection-program/00/527483

https://www.forbes.com/sites/kellyphillipserb/2020/04/08/overwhelmed-plain-talk-on-the-paycheck-protection-program-for-small-businesses-affected-by-covid-19/#2bcfc7ff1cbf

 

Brewing Additional Revenue for Your Farm: How Pennsylvania’s Changing Liquor Laws Open New Market Opportunities for Agricultural Producers

By: Sarah Phillips

Part of running a successful business is knowing when and how to diversify. As the agricultural market becomes more competitive and consumer-driven, farmers are becoming experts on creating niche market opportunities to meet consumer demands.

Over the last several years in Pennsylvania, the liquor laws have become more relaxed. Thanks to the passing of Act 39 by Governor Wolf, farmers have been able to expand their offerings to include farm-fresh, locally produced beer, hard cider, and wine. The new laws allow agricultural producers to not only grow, process, package, and sell their own alcoholic beverages, but they can also do all of this right on their own farms. It is not uncommon to see farms opening their own “tasting rooms” in old barns on the farm property, and now, doing so is a much easier process than obtaining a traditional liquor license.

River Bend Hop Farm and Brewery located in Newport, PA. It opened in 2017 thanks to the passing of Act 39.

getting started

Obtaining the appropriate licenses and permits can be a lengthy process, so it is best to start filing the necessary paperwork right away. A delay in receiving the required approvals could mean a delay in opening your new business, which could severely impact your cash flow and the ultimate success of the business.

Because there are several different types of licenses you can apply for, before you file, you must first decide which license is appropriate for your particular business goals. Each license comes with its own set of requirements and only allows your business to engage in certain activities.

Your first option under the new liquor laws is to apply for a Manufacturing License, known in the business as a “G” license. This license allows you to manufacture wine, beer or hard cider on your premises and sell it to consumers for both on and off-site consumption. The “G” license requires that you have at least ten seats and food available on the premises. A “G” license will also permit you to sell your alcoholic beverage in pints, growlers, and even kegs. For agricultural entrepreneurs who have limited funds, want to start small, or are not interested in managing a huge operation, a “G” license may be the best option to provide supplemental income for the farm.

A second license option for your farm is to apply for a Brew Pub License, which is known as a “GP” license. Keep in mind that your farm would need to apply for both a “G” license and a “GP” license to enjoy the perks and benefits that come with a “GP” license. Under this license, your on-farm tasting room can stay open until 2:00 a.m., but you must have seating and food for at least 30 people. Additionally, under this license, your business must apply to the Pennsylvania Department of Health for a health permit.

It is important to remember that the federal government has its own set of laws that govern the production and sale of alcohol for on-farm operations. Getting the appropriate federal approval is even more complicated and time-consuming, so it is best to start this process right away. You can apply for both federal and state approval at the same time, so there is no need to wait to receive approval from one before applying for the other. For more information on that process, check out this resource.

additional profit-making opportunities

Act 39 also changed existing law to allow farmers and agricultural producers to sell their alcoholic beverages off-site at a farmers market. Like the other types of licenses discussed above, a farmer is required to apply for and receive a special license to sell at a farmers market. There is a filing fee, and you must inform the Pennsylvania Liquor Control Board of the location of the market you want to sell at as well as the hours you expect to be there. In addition to the farmers market license, you should always check with the coordinator of the farmers market you wish to attend because most markets also require proof of insurance and inspection certificates.

Reid’s Winery is just one of many Pennsylvania vendors that attends farmers markets throughout Adams County to sell their locally produced wine and hard cider.

Act 39 provides additional incentives to create your own on-farm tasting room by making it permissible to sell beverages from other local breweries. This allows agricultural entrepreneurs to not only expand their product offerings but increases their ability to collaborate with other local agricultural entrepreneurs.

other important considerations

As an agricultural entrepreneur, expanding your business to offer your own locally produced beer, hard cider or wine can bring in additional revenue that will make your larger farm business more sustainable. Like all new entrepreneurial endeavors, you should always consult your local township’s laws to make sure you do not violate any zoning ordinances. Attending local town council meetings or consulting with a local attorney is advisable to make sure your business is operating in accordance with all applicable permits and licenses. It is also recommended that you consult with your farm insurance agency to make sure you are in compliance (or start complying) with any regulations the agency has about on-farm businesses and customers.

You can stay up to date with Pennsylvania’s changing liquor laws by subscribing to the Pennsylvania Department of Agriculture’s Weekly Roundup Newsletter, which provides timely updates on laws and regulations that can affect agricultural entrepreneurs and their respective businesses.

This post was originally authored February 9, 2020, and can be found here.

Sarah Phillips, at the time of this blog post, is a third-year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as an Honor Code Representative and a Law Lion Ambassador. Sarah is the Editor-in-Chief of the Dickinson Law Review.

Sources:

Click to access 003462.pdf

Click to access Winery%20and%20Farmers%20Market%20QandA.pdf

Click to access February%202017%20Presentation%20for%20PA%20Producers%20and%20Licensees.pdf

https://www.wesa.fm/post/farmers-markets-get-boozy-thanks-pas-relaxed-liquor-laws#stream/0

http://www.riverbendhopfarmandbrewery.com

https://bit.ly/2OHIgJX

Picture Sources:

https://bit.ly/2H7OCht

https://www.reidsorchardwinery.com

Take a Whisk & Start a Business from Scratch: Registering Your Kitchen as a “Limited Food Establishment” in Pennsylvania

By: Jasmine Sandhu

I frosted my carrot cake with buttercream icing. I thought to myself: “Drop out of law school; this masterpiece will make millions.” But this recipe already had made millions. Yes, I used a store-bought cake mix and icing. If the thought crossed my mind, people with actual baking skills must think about starting a business often. Unfortunately, 60% of traditional food businesses fail within their first year, and 80% fail within four years.

You may be able to test your idea without the risks associated with starting a traditional food business – “Cottage Food” state laws allow entrepreneurs to sell food produced in their kitchens. In Pennsylvania, a person may start a food business in their home as a limited food establishment (“LFE”).

I’m not the face of the next Cake Boss, but this blog makes Pennsylvania and federal rules about LFE registration digestible.

why register your kitchen as a lfe?

Selling food within friend circles or on social media without LFE registrations may be illegal. The first violation is a summary offense. Three violations within two years is a third-degree misdemeanor. Each violation can also result in a $10,000 fine.

what are the barriers to obtaining a lfe registration?

Before discussing the LFE application, you should be aware of the barriers below that could prevent you from obtaining an LFE registration. If you cannot overcome a barrier, consider: (1) contacting a nearby commercial kitchen; or (2) creating another kitchen in your home and applying for commercial status with the Department of Agriculture (“Department”).

  1. Prohibited Foods

The Department prohibits Time/Temperature Control for Safety (“TCS”) foods. Typically, foods requiring refrigeration are TCS. Rejected TCS foods include:

  • Fresh fruits/vegetables;
  • Garlic-in-oil products;
  • Meat; and
  • Desserts with cream-based fillings (no Boston crème donuts – I know, blasphemy).

What if your masterpiece is a moist cake or salsa? These foods are “questionable products.” You must submit the food to a lab to test the pH and water levels.

2. Pets/Animals
You cannot register your kitchen if you have pets in your home at any time. However, the Department may grant the registration if there is:

    • A physical barrier (e.g., door) to the kitchen making it inaccessible to pets; and
    • A separate entrance to the kitchen, so ingredients are transported through areas inaccessible to pets.

    Fish, reptiles, or other cage-confined animals aren’t considered “pets,” as long as they aren’t located near the kitchen.

    1. Private Water and Sewage System

    Water supply and sewage disposal must be approved. If you use public water and sewage system, you’re in the clear. If your source of water is private, you must submit the water to a lab to test for chemicals. Annual testing is required to maintain registration. If you have private sewage disposal, you must contact your certified Sewage Enforcement Officer to discuss if your system is appropriate for a food business.

    1. Local Requirements

    Local zoning or ordinances may prevent the use of home kitchens for businesses. Department approval doesn’t imply that the business complies with local requirements.

    Contact your municipality to ensure that a food business from your kitchen is allowed.

    how do I prepare and submit the application?

Everyone who wants to sell from their kitchen must fill out a free application to register it as a LFE. Submit the application to your regional office, who will review it within 3 to 5 weeks. The application packet is 20 pages. Don’t be alarmed – the actual application starts on page 15. Here’s a checklist to help you prepare:

Click to learn more about allergens, Net Wt. calculations, and licenses to collect taxes.

what should i expect after submitting the application?

If your application is rejected, the Department will issue a letter specifying reasons for the disapproval. You can resubmit applications.

If your application is approved, an inspector will examine your kitchen and collect a $35 registration fee upon a successful inspection. After this, you can sell foods produced in your kitchen. The inspection report serves as approval before you receive registration in the mail.

If the inspector finds deficiencies, you may correct them and ask for another inspection.

what rules are there to consider when running a lfe?

  • Don’t process business and personal food simultaneously. Don’t commingle ingredients between business and personal food processing.
  • Don’t allow children in the kitchen during business food processing.
  • Be wary of health claims on labels (e.g., “Gluten-Free”). These must be verified through sub-ingredients or testing.
  • Food and Drug Administration requires nutritional labeling if you sell foods across state lines. A small business exemption may apply.

final “food” for thought…

Debbi Fields, an entrepreneur, explained: “I loved making cookies, and every time I did, I made people happy. That was my business plan.” She started her business from scratch – baking cookies from her kitchen, which turned into a million-dollar company.
I’m not a baker. Yet, I felt joy from baking a store-bought cake mix. This joy must be small compared to what Ms. Fields or you may experience. Starting a food business is risky, but the risk is lower when you can use your kitchen. Register your kitchen as a LFE, so you can take that whisk, roll in the dough, and make that bread.

This post was originally authored January 30, 2020, and can be found here.

Jasmine Sandhu, at the time of this post, is a third-year law student at Penn State’s Dickinson Law. She grew up in Northern California and completed her B.S. at UC Davis. Jasmine is interested in transactional law, specifically corporate and real estate. She is also passionate about legal topics where the law intersects with race (e.g. immigration and criminal law). She currently serves as a Law Lion Ambassador and the Symposium Executive Editor of the Dickinson Law Review. After graduation, Jasmine will join a transactional practice group at Dechert LLP in Philadelphia.

Sources:

Official Website for Limited Food Establishments

PA Consolidated Statutes, Title 3, Chapter 3

Statute Language on Criminal and Civil Liability for Violations

https://forrager.com/law/pennsylvania/

https://www.pickyourown.org/CottageFoodLaws-Pennsylvania.php

Photo Sources:

https://www.vectorstock.com/royalty-free-vector/hand-hold-gavel-icon-cartoon-style-vector-23227498

https://www.countrycottagesonline.com/pet-free-cottages-uk.htm#.XkF9Qi2ZOu4

https://www.wikihow.com/Check-Zoning-Laws 

https://blog.insyncinsurance.co.uk/index.php/takeaway-insurance-tips-how-to-prepare-for-health-inspections 

https://www.amazon.com/One-Smart-Cookie-Housewifes-Multimillion-Dollar/dp/0671618385 

 

Staying in the Loop: Using the Right Resources to Get the Latest Information

By: Sarah Phillips

When you are busy starting and running your own business, you do not always have the time (or extra funds) to invest in publications or sources that provide you and your business with the latest industry news. Luckily for many entrepreneurs, especially agricultural entrepreneurs, there are several free resources available that provide timely, relevant, and succinct information that can help develop a young company. These news sources explain changes in the marketplace, explore technological resources, and highlight upcoming seminars or conferences.

The American Agriculturist does just this for agricultural entrepreneurs in the United States, including providing a daily distribution of region-specific information. American Agriculturist has 18,000 subscribers and over 3,000 regular readers across the United States. In addition to delivering a variety of weekly and monthly subsector specific newsletters to subscribers’ inboxes, the publication’s website shares updates on the markets for five different sectors. It also has an entire section dedicated to conservation practices, safety tips, regulatory updates, and general business advice. For example, in November 2019, the special features section of the publication focused on insurance and finance advice for agricultural business operators.

As a young entrepreneur, it can also be invaluable to learn from both the successes and failures of others. American Agriculturist recognizes this and is currently in the process of developing a podcast that shares discussions with young farmers about their challenges, struggles, and successes in the early years of business. Hopefully, aspiring agricultural entrepreneurs will be able to apply others’ stories to their start-up businesses and experience success. Agricultural entrepreneurs who are interested in following these stories should subscribe to the weekly newsletters.

For additional resources, agricultural entrepreneurs should view:

1. Hoard’s Dairyman Intel

2. Beef Magazine – Management, Tactics and Tools Used to Operate a Farm Business

3. University of California’s Agricultural Sustainability Institute

4. Farm Credit Midatlantic – Newsroom

This post was authored on January 16, 2020.

Sarah Phillips, at the time of this blog post, is a third-year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as an Honor Code Representative and a Law Lion Ambassador. Sarah is the Editor-in-Chief of the Dickinson Law Review.

Picture Source:

https://marketing.farmprogress.com/brands/state-regional/american-agriculturalist/

Sources:

https://www.farmprogress.com/farm-business/farm-operations

https://www.forbes.com/sites/theyec/2017/06/29/five-lessons-learned-from-failing-in-business/#2d2446ab2bd7

 

 

Agriturismo Serafina | A Family of Entrepreneurs in Italy | July 2019

By: Samantha Prince

FURORE, ITALY. Happy to introduce to you the Fusco family – owners of Agriturisimo Serafina. Since we are on break for the summer, I thought it fitting that I write a post about this entrepreneurial family that I had the pleasure of visiting last month.  I am hereby dubbing them our July Entrepreneurs of the Month.

In planning our trip to Italy, it was important to my son and I to visit the Amalfi Coast but do so in a manner that was more adventurous than simply staying in a busy town hotel.  Additionally after being in Rome for a few days, and hiking up Mount Vesuvius, a quiet place to relax was warranted.

In comes our visit to Agriturisimo Serafina!  This 4-generation family run mountainside farm opened its doors to expand its business from agriculture alone to a B&B and restaurant experience that is unparalleled!  The view from there is spectacular as you can see in this photo.

Rosa (one of two daughters in the family) met us upon arrival and enthusiastically showed us their kitchen and farm.  One could easily tell that she was a hard worker (she carried my 45lb suitcase on her shoulder down a very steep flight of stairs), but if there was any doubt, she explained that since they are on the mountainside, all farming needs to be done by hand – no machinery.  They grow what they need in order to provide for their family and guests: Lemons, grapes, mandarin oranges, tomatoes, garlic, olives, etc.  They also sell food items they’ve made.

What’s in a Name?

Choosing a name can be a daunting task for an entrepreneur starting a business. Some choose names that are descriptive and some choose names for the meaning.  In 1996, when Domenico and his wife Giuseppina opened their farm to the public, they had to select a name.  They chose the name “Agriturismo Serafina,” after Domenico’s grandmother.  Why? Serafina was a strong woman who took care of the farm, family and animals but was also known in the village for her generosity: primarily sharing food with lower paid farm workers in the village so that they could feed their families.  In essence she was an early social entrepreneur!

Expanding FarmING into Tourism

Some entrepreneurs change business direction, or include an add-on when they see a need in the marketplace but some expand out of financial necessity.  Given the taxes and other stresses for agriculture in its area, the family farm needed to do something to survive financially.  The answer was to open to the public in the form of a B&B and restaurant, or “agriturismo.”

However, no matter what your initial motivation is when expanding, a conscientious and successful business owner must prioritize customer service and provide quality products. The family at Serafina exemplifies this philosophy.  For example, dinner was from 8-11 and all of the prepared food was grown or raised on their farm.    During those three hours, we were served course after course of delicious fresh food.  Also, each time Rosa brought something to our table, she gave us an explanation.  I’d be remiss if I didn’t mention the wonderful homemade wines and liqueurs that accompanied the meal as well!

Know the Laws

No matter what your industry is, you must know the laws that apply.  When expanding your business, you must learn more laws as now additional ones may apply.  In going from solely an agricultural business to one that has overnight guests and a restaurant,  Agriturismo Serafina had to learn about and abide by laws such as hygienic laws governing dwellings and food safety.  Being compliant can take a lot of energy but it is better than violating the law and dealing with the consequences thereafter.

Conclusion

Running a farm is a large endeavor; adding the layer of having guests arrive and attending to them is an even larger endeavor!  Before we departed, Domenic0 handed my son a Serafina card and a bottle of homemade mandarincello and said “tell your friends.” Good service, good marketing, solid business philosophy… or simple kindness?  All of the above!

The Fusco family are a multi-generational family of social and agricultural entrepreneurs.  We were happy to get to know them while on our travels.

 

Enhance Your Business by Becoming a Certified Organic Producer

By: Sarah Phillips

The ability to market your products as “Certified Organic” will benefit your business. In addition to the rapidly growing consumer demand for certified organic products, you will have the ability to create marketing campaigns that demonstrate your commitment to the organic values that customers prioritize.

The National Organic Program (“NOP”) is a government sponsored program that allows qualifying participants to use the “Certified Organic” seal on their products. It is facilitated by the United States Department of Agriculture (“USDA”) in accordance with the Organic Foods Production Act (“OFPA”).

The process to become certified organic is long and costly. However, the demand for organic products is expected to last, and those products can be sold for a high premium. Many agricultural entrepreneurs are taking advantage of this consumer trend and selling a variety of organic meats, organic produce, and other farm fresh organic products.

There are many steps that you will need to carefully follow in order to become a certified organic producer. Failure to do so could cost you thousands in lost fees and property improvements, as well as a denial of your organic certification application.

Step 1: Adopt Organic Practices

Title 7 of the United States Code of Federal Regulations contains the applicable rules and guidelines for operating a certified organic farm. Before you are permitted to apply for a certified organic license, you must adopt, and be able to sufficiently demonstrate, that you have implemented all of the required organic practices on your farm. For example, one section of the organic certification laws require that the farmer maintain or improve the natural resources of the operation, including soil and water quality.

It is important to decide on your type of agricultural operation first before you start making plans. Different production areas have different regulations that must be strictly followed. Livestock operations are required to adopt certain protocols for feeding their animals, administering medication to sick animals, and acquiring new animals. Similarly, produce farms have specific regulations that must be followed regarding crop nutrient management plans and fertilizer application.

It is important to adequately plan, document and implement your organic processes before you take the next step. Failure to prepare effectively will delay your ability to obtain a certified organic license, which will cost you and your business significant time and money.

Step 2: Select a USDA Accredited Certifying Agent

The USDA has partnered with accrediting agents who are on the ground in regions across the country to work with you throughout the application process. You must go through one of these accrediting agents to become a certified organic producer; they are the only agents permitted to issue an organic certificate. The USDA’s website provides an online database of certifying agents, where they are located, and how to contact them.

Certifying agents are familiar with all of the regulations in the NOP, and can serve as a valuable resource in making sure that you and your farm have complied with every legal requirement necessary.

Step 3: Application Review and Inspection

Once you have selected your certifying agent, you will need to complete and submit a lengthy application that outlines, in detail, how your operation complies with the USDA’s organic regulations. After the USDA receives and conducts a preliminary review of your application, your operation will be open to an inspection. This inspection will ensure that your operation is complying with all the regulations. One of the major components of passing the inspection is adequate compliance with The National List of Allowed and Prohibited Substances.

This list identifies the substances that are both permitted and prohibited for use on an organic operation. Therefore, it is crucial to understand how substance use will impact your operation and confirm that you are not using anything that could jeopardize your organic production processes.

Generally, most synthetic substances are prohibited. Antibiotic use is never allowed when raising organic animals, even if that animal is sick with a disease easily treatable with an antibiotic. If an antibiotic is used, the animal must be removed from the operation immediately, or you risk losing your organic certification.

Additionally, many consumers equate organic with “pesticide free,” which is simply not the case. The list outlines both synthetic and non-synthetic substances that can be used in organic crop production. As a producer and entrepreneur, aside from understanding this list to protect your organic certification, it is important to understand what substances you can use, why and how those substances impact the product and the environment. It will be one of the most common questions asked of you by consumers, and a proper understanding will help you develop more effective, truthful and accurate marketing strategies.

Steps 4 & 5: Inspection Follow-up and Approval

After the inspection has been completed, your certifying agent will review your application again, as well as conduct a review of the inspection report. After review, if you meet all of the legal requirements, you will be issued a license to use the official USDA certified organic seal on your products.

Ongoing Considerations

Once you receive your organic certification, your operation is open to continued inspections. Additionally, as you modify the farm, your production, or your practices, you must update your organic practices plan. It is important to always follow protocol and stay current with changing regulations; doing so will ensure your ability to use the certified organic seal.

Finding the funds to facilitate your operation’s transition to a certified organic farm can be difficult. The USDA offers different grants and a cost-share program to assist farms in obtaining the financial means to move forward with the three-year transition. To learn more about those programs, click here to read a previous blog post that highlights the programs’ important features.

Selling organic products is not the right business decision for every operation. By researching other organic operations, and thoroughly learning the legal requirements to market your products as organic, you will be able to make the right decision for your farm.

*This post was authored on March 31, 2019 and has been reprinted with Sarah’s permission. The original post can be found here.

Sarah Phillips, at the time of this blog post, is a rising third year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as a Honor Code Representative and a Law Lion Ambassador.  Moving forward to her 3L year, Sarah will be the Editor-in-Chief of the Dickinson Law Review.

Sources:

https://www.ams.usda.gov/services/organic-certification

https://www.ams.usda.gov/services/organic-certification/certification

https://www.ams.usda.gov/services/organic-certification/becoming-certified

https://www.ecfr.gov/cgibin/retrieveECFRgp=&SID=58ce67d13764a8b1f47ffa11058f7e97&mc=true&n=pt7.3.205&r=PART&ty=HTML

https://www.thebalancesmb.com/before-you-transition-your-farm-to-certified-organic-2538059

Pictures Sources:

What You Need to Know About Organic Fraud in the U.S. — And Why It’s So Important to Take Action to Protect Organic Standards

https://bit.ly/2WHhoeT

Prepare To Make Your Farm Certified Organic

Are You Turning Your Barn into a Wedding Venue? Here’s What You Need to Know

By: Sarah Phillips

Within the last decade, many family farms have been forced to sell their property because they can no longer earn a living from traditional agriculture. The next generation of farmers is searching for alternative or supplemental ways to utilize their farm assets to earn extra income, which could mean saving the family farm. The big potential profits that can come from adding an agritourism business to an existing farm have sparked a pop-up of corn mazes, farm camps and rustic barn wedding venues.

A recent survey by “The Knot” estimated that converted farm barns are the second most popular
wedding reception venue. The market demand continues to grow, and if you already have a barn on your property, it can be a quick way to earn additional income with low input costs. However, opening and operating a wedding venue on farmland presents a unique challenge, especially if your farm is preserved.  The challenge is navigating the complicated process of complying with local zoning and ordinance laws, and potentially complying with state or federal farmland preservation laws.

Zoning and Ordinance Considerations

Zoning Laws

The first regulations you should check before you start advertising your barn as a dream wedding venue are the applicable zoning laws for your municipality, township or city. Most farms are typically zoned for agriculture purposes, but are not zoned for commercial business. If you are not zoned for commercial business, you will likely need to apply to your local zoning board for a variance. Additionally, if you live on the farm, you will want to check where the residential and agricultural zoning lines are drawn; some towns have special rules that prohibit the operation of a business in residential zones.

Zoning codes can also dictate if and where you can place an industrial kitchen on the property, the location and number of restrooms needed, and if you can have a liquor license. These are separate issues, each with their own guidelines and permitting processes. Failure to comply with each set of rules could expose your farm and your personal assets should a court find you liable for operating a wedding venue without the proper permits.

Remember, zoning codes are a local issue. While your state may provide general guidance about what is acceptable and what is not, you should always check with your local governing body to make sure you are in compliance.

Ordinances

Even if you have met all of the general zoning requirements, you still need to comply with your local ordinances. Nothing can ruin the success of a wedding venue quicker than making your neighbors mad with loud noises late at night or a high traffic volume at inconvenient times. For example, most towns set a certain time, usually between 10:00 pm and 11:00 pm, that music and lights need to be turned off.

Similar to zoning laws, ordinances are a local issue and you should talk with your local governing body to make sure you operate according to the local rules.

Farmland Preservation Laws

The biggest obstacle you will face when you open your barn up to wedding guests is complying with farmland preservation laws (assuming your farmland is preserved). Preserved farmland is farmland that has had its development rights sold to the government in exchange for a cash payment, essentially preserving it as open space designated for agriculture use in perpetuity. While the cash payment does have an immediate benefit, and can often be crucial in saving a family farm, some of the subsequent restrictions can cause difficulty in the future if you are trying to convert your barn into a wedding venue.

Before you apply for permits and variances to host weddings on your farm, you are going to need to decide where you will host the weddings. Whether you have an old barn, or you picture yourself building something new, it is important to know what preserved farmland laws permit to be done on the property. In many states, like Pennsylvania, farmland preservation laws do not allow you to build new infrastructure on the property unless it is for an agricultural purpose, and bad news, weddings do not count as an agricultural purpose. However, the law does permit you to renovate and repair any existing structure on the property. Luckily, many construction companies now exist that specialize in rustic barn restoration.

Other states have farmland preservation laws that restrict the type of activity that can take place on the preserved farmland. In New Jersey, farmland preservation laws do not allow the owner to utilize the land for any commercial purpose unless that activity is also recognized as an agricultural practice. Many New Jersey landowners who no longer farm in the traditional sense are looking to use their families’ farmland in different ways – a boutique vineyard that hosts corporate events or a converted alpaca show barn to host weddings are just a few examples. However, many of these venue owners are struggling to get permission to operate because the preserved farmland committees cannot give variances for commercial businesses on preserved farmland.

Final Considerations

Capitalizing on the growing demand for rustic wedding barn venues can be an extremely profitable way for future generations to earn a living, and keep the family farm alive; agritourism is a sector of the larger agricultural industry that will continue to flourish. To take advantage of this growing niche market, the best thing to do is to get in contact with your local zoning or farmland preservation board and find out the specific permits, variances and licenses you will need. Failure to comply could put your farm and your personal assets, like your house or car, at risk should something go wrong on your property. Communicating with your state’s department of agriculture can also be a great place to learn how you can get started.

*This post was authored on February 5, 2019 and has been reprinted with Sarah’s permission. The original post can be found here.

Sarah Phillips, at the time of this blog post, is a second year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as a Honor Code Representative and a Law Lion Ambassador.  Moving forward to her 3L year, Sarah will be the Editor-in-Chief of the Dickinson Law Review.

Sources and Relevant Links:

https://myfarmlife.com/life-on-the-land/so-you-want-to-start-a-wedding-business/

https://www.agmrc.org/commodities-products/agritourism/agritourism-checklists/zoning-and-health-considerations-in-agritourism

https://www.nj.com/mercer/index.ssf/2011/03/state_board_sides_with_hopewel.html

https://www.bostonglobe.com/business/2017/12/24/critics-call-for-update-year-old-mass-farmland-preservation-law/IZGGcJR9td9VdNdznGQMxK/story.html

http://stablehollowconstruction.businesshomepage.info/restoration/barn-restoration

https://www.theatlantic.com/family/archive/2018/05/barn-weddings/560099/

https://www.theknot.com/content/popular-wedding-reception-venues

http://www.durhamhillfarm.com

Picture Sources:

https://www.woodsedgeevents.com/jackie-brandon/vr0lo1skb441h8qozfx52xvocojapx 

http://www.durhamhillfarm.com/the-barn/ 

U.S. Department of Agriculture Makes Funding Available for Small Businesses in Rural America

By: Zach Gihorski

Did you know the United States Department of Agriculture (USDA) offers several funding opportunities targeted at both small business owners and non-profits who serve businesses in rural communities? Probably not. These USDA programs provide assistance to growing businesses in rural communities via loans and grants. You are probably asking yourself why you have never heard of this program before, which is completely understandable. There are numerous programs provided by the government that business owners never hear of. The truth is, these programs just do not come with any marketing or promotional dollars attached to them to spread the word.

USDA MicRo-entrepreneur Assistance Grant Program

The Rural Micro-Entrepreneur Assistance Program (RMAP) is designed to give funding to non-profit organizations servicing rural businesses, or as USDA calls them, Microenterprise Development Organizations (MDOs), who in turn administer and manage the funds given out to micro-entrepreneurs.

What is a Microenterprise Development Organization (MDO)?

There are three type of entities qualified to receive the RMAP funding from USDA-Non-profits, Federally-recognized Tribes, and Institutions of higher learning. These organizations receive the funding from the USDA and then use those funds to support rural micro-entrepreneurs. MDOs are charged with making their funds available to their local rural micro-entrepreneurs. MDOs must also manage the administration of the grants and loans to the micro-entrepreneurs, and do the required reporting back to USDA.

Who are Micro-Entrepreneurs?

These are the intended users of the USDA funds. While it is true that the USDA first disburses the initial funding to MDOs for their expertise in supporting micro-entrepreneurs in their local areas, the MDOs must then make those funds available to qualified micro-entrepreneurs.  According to the USDA, a micro-entrepreneur is a business that is located in a rural community, with less than 10 full-time employees. If you are curious to see if your business is in eligible rural area, check here.

What type of funding does RMAP provide?

The RMAP provides aid in the form of both grants and loans. In regard to grants, the program allows both micro-entrepreneurs and MDOs to receive aid for technical assistance. However, a minimum of 15 percent of the requested aid must have matching funds from the applicant.

The loans provided by the RMAP program for micro-entrepreneurs have a few specific restrictions according to USDA. The loans can be up to $50,000, they must have a fixed interest rate, and the loans are limited to 75 percent of the total project cost.

What can the funding be used for?

USDA lists four specific examples, but goes on to explain that funding for micro-entrepreneurs is not limited to these categories. The listed examples are: working capital, debt refinancing, purchasing of equipment and supplies, and improvements to real estate. Allocating sufficient capital for these types of projects are huge obstacles for many entrepreneurs for which the program has made funding available.

When can you apply for the RMAP Program?

Right now! USDA is currently accepting applications. Reach out to your local USDA office for more information on how to apply.

Other USDA Programs Available

The Rural Micro-Entrepreneur Assistance Program is just one of the many programs that USDA has that is looking to invest in American businesses. From assisting with broadband access to investing in renewable energy sources, the USDA has a robust portfolio of resources available to businesses. For a more detailed list, look here.

Still have questions?

USDA has a great reputation for being responsive to the needs of local communities. Please do not hesitate to reach out to your local USDA office any time. You can reach out to your state USDA Office and ask a program specialist who can assist you. To locate your local USDA Office, click here. To go directly to the USDA page for the RMAP Program and get all the details here.

*This post was authored February 6, 2019.

Zachary is a 2nd year law student at the Dickinson School of Law. Where he is an active student leader, actively cultivating relationships with outside resources to give opportunities to his classmates. He is passionate about using his experiences in both the private and public sector to find innovative solutions for the world’s agricultural, energy, and environmental needs.

Sources:

  1. Electronic Copy of the Federal Regulations creating the Program: https://www.ecfr.gov/cgi-bin/retrieveECFR?gp=&SID=e3aa598058a8b3fdb184d9b72e7b8101&n=pt7.15.4280&r=PART&ty=HTML#sp7.15.4280.d
  2. Rural Development Fact Sheet on RMAP Progam: https://www.rd.usda.gov/files/RD-FactSheet-RBS-RMAP.pdf
  3. List of Services and Programs for Businesses at USDA: https://www.rd.usda.gov/programs-services/programs-services-businesses
  4. USDA Website Page on the Rural Micro-Entrepreneur Assistance Program:https://www.rd.usda.gov/programs-services/rural-microentrepreneur-assistance-program

Photo Sources:

  1. https://smallbiztrends.com/2010/01/2010-rural-small-business-trends.html
  2. https://www.flickr.com/photos/usdagov/44239779574/in/album-72157698591256222/

 

 

Financial Assistance for Agricultural Entrepreneurs

By: Sarah Phillips

Starting your own agricultural business, whether it be agritourism, a microbrewery, organic farm, etc., can be a daunting task. Not only do you have typical start-up considerations but you will also need land, access to equipment, labor, a plan for managing your crops, and avenues to market and sell your product. In addition, you need to have the proper infrastructure, which can be the most expensive aspect of building an agricultural business. If you were not born in the 2% of American farm families, you might be left wondering how you could possibly access all that you need to start your business. If you are lucky enough to be part of a farm family, you may be wondering how you can access the expensive specialty tools and equipment that a standard farm operation may not have.

The United States Department of Agriculture (USDA) offers many funding programs aimed at facilitating the growth and success of agricultural businesses through grants and loans. The Specialty Crop Block Grant Program, the Farmers Market Promotion Program and the Organic Cost Share Program are all financial assistance opportunities that agricultural entrepreneurs are able to take advantage of in order to put their ideas into practice.

What are my Funding Options?

It can be overwhelming to read through all the options while trying to figure out which avenue is best for you and your business. How do you know which one to pick? The Specialty Crop Block Grant Program, the Farmers Market Promotion Program and the Organic Cost Share Program are three programs that all agricultural entrepreneurs should look at first because they cover a wide range of potential businesses and they recognize non-traditional agricultural opportunities.

     1. Specialty Crop Block Grant Program

Interested in opening your own microbrewery? Then this program is for you! The goal of this grant is to help agricultural entrepreneurs enhance the competitiveness of specialty crops. Specialty crops are considered to be fruits and vegetables, tree nuts, dried fruits, horticulture and nursery crops (including floriculture). If you are planning on growing any of these plants and want to apply for funding through the Specialty Crop Block Grant Program (SCBGP), your plants must be cultivated or managed and used by people for food, medicinal purposes and/or aesthetic gratification. The funding you receive could assist in purchasing the tools and equipment needed for proper cultivation of crops or support an increased marketing effort.

The USDA provides a sample list of plants considered to be specialty crops (hops are included), as well as a list of ineligible crops. To apply for this grant, applications must be submitted to your State Department of Agriculture. Applications are gathered only for a certain time period every year, which can vary by state, but the collection usually takes place at the beginning of each calendar year.

     2. Farmers Market Promotion Program

If you are an agricultural entrepreneur who wants to increase consumers’ access to locally grown produce or develop agritourism programs that generate consumer awareness and education, funding through the Farmers Market Promotion Program (FMPP) might be right for you. Grants dispersed through the FMPP are meant to help improve and expand farmers markets, community supported agriculture (CSA) programs and other agritourism efforts. They can also assist in developing, expanding, and supporting new producer-to-consumer marketing opportunities. Applicants must be domestic entities that are owned, operated and located within the 50 United States or the District of Columbia, American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, or the U.S. Virgin Islands. Like the SCBGP, applications are open at the beginning of each calendar year.

     3. Organic Cost Share Program

If you are already a certified organic producer or handler, and live in a participating state, then you may be able to take advantage of one of the two available Organic Certification Cost Share Programs (OCCSP). As an agricultural entrepreneur, being able to market you product as organic will likely have a positive financial impact on your balance sheet. But in order to take advantage of the highly sought-after organic label, you must complete the USDA organic certification program, The National Organic Program, which has a high cost and takes many years to complete. The first program option is the National Organic Certification Cost Share Program (NOCCSP), which provides financial assistance to organic producers and handlers who are obtaining or renewing their organic certification. You could receive up to 75% of certification costs through this program.

The other program option is the Agricultural Management Assistance (AMA) Organic Certification Cost Share Program. This program can help agricultural entrepreneurs provide sustainable care for their land and crops by facilitating funding to address water management, water quality and erosion issues. Program participants can receive up to 75% of the cost of installing conservation practices on their operation, and additional funding is possible if you are a member of a historically underserved producer group.

OCCSP applications are accepted on a rolling basis through your county’s Farm Service Agency (FSA) office or your state department of agriculture.

What if I Have More Questions?

If you have additional questions about these programs, the availability of other programs, how to apply, or if your agricultural operation is eligible to receive funding, you should reach out to your local FSA office or county extension office. A program specialist who is familiar with relevant state or county program variations will be able to help any agricultural entrepreneur find the right funding!

For a list of state and local FSA offices, click here: https://www.fsa.usda.gov/state-offices/index

Sarah Phillips, at the time of this blog post, is a second year law student at Penn State’s Dickinson Law. She is from West Amwell, New Jersey and has interests in agricultural, land use and business transactional law. She is currently serving as a Honor Code Representative and a Law Lion Ambassador.

 

Sources:

https://www.usda.gov/topics/farming/grants-and-loans

https://www.ams.usda.gov/services/grants/scbgp

https://www.ams.usda.gov/sites/default/files/media/Combined%20Grants%20Decision%20Trees.pdf

https://www.ams.usda.gov/services/grants/fmpp

https://www.thebalancesmb.com/get-usda-organic-certification-2538057

https://www.ams.usda.gov/services/grants/occsp

https://www.fsa.usda.gov/programs-and-services/occsp/index

https://www.nrcs.usda.gov/wps/portal/nrcs/main/national/programs/financial/ama/

Picture Sources:

https://thrivecarolinas.com/event/farmers-market-creations/attachment/farmers-market/

https://www.thefarmhousebrewery.com/hours