Many small towns with a population of more than 1,000 have revolving loan funds through an economic development authority (EDA) to aid small businesses in town with gap financing. This aid helps entrepreneurs start or expand their operations that may not qualify for enough conventional financing to achieve their dreams.

Although a variety of businesses are helped, including agricultural processing, the EDA funds typically only cover businesses in the cities since these entities are controlled by city government. Agriculture itself is often excluded because farmland is located outside the city limits.

However, there are new programs available to help farmers. The names are a bit confusing — Slow Money, Renewing the Countryside and Grow a Farmer Fund being examples — but they aid agriculture in somewhat the same way revolving loan funds do for Main Street businesses.

The Grow a Farmer Fund is administered by the Southern Minnesota Initiative Foundation, which is a frequent investor in southern Minnesota, including early childhood, economic development and community foundations. The aim of the farm fund, spearheaded by Slow Money Minnesota, is to provide small-scale sustainable farmers in SMIF’s 20-county region low interest loans that will help them improve their operations and increase their bottom lines.

In some ways, it is like the revolving loan funds under EDAs in various communities, except it has strictly an ag focus. Instead of a government fund, though, it is donation-based, raising money from individuals, restaurants and others interested in supporting a stronger local foods economy in southern Minnesota, according to SMIF President/CEO Tim Penny.

SMIF and its partners hope to raise $100,000 by Sept. 1 to launch this fund. The allocations will be “small potatoes” when measured against traditional ag loans. For example, Penny highlighted that farmer John Mesko used a $350 investment in a three-point hitch to help him move his hog farm business from “just getting by” to a profit-generating enterprise.

SMIF has a 30-year history of small-scale, “seed” investments for a sustainable region, noted Penny in a column that ran in this newspaper last month. The principles of Slow Money align closely with SMIF’s philanthropic efforts, he added.

Slow Money Minnesota has a goal to “bring money back down to earth,” claiming that “there is such a thing as money that is too fast, companies that are too big, finance that is too complex.” The network aims to “connect investors to the places where they live, creating healthy relationships and new sources of capital for small food enterprises,” as stated in one of its principles.

SMIF’s Grow a Farmer Fund is “targeted at smaller-scale farmers trying innovative approaches that have a harder time accessing traditional funds, don’t qualify for subsidies or lack typical collateral,” wrote Penny in his column.

That sounds a lot like the clientele of small town EDA revolving loan funds. Big business will always dominate the economy, but in recent years small towns have created a tool to help small-scale, sustainable businesses create a more vibrant community while helping the local economy.

Farming is vital to maintaining a healthy economy in southern Minnesota. While the Grow a Farmer Fund won’t impact the large scale farming that has the greatest impact in agriculture, and our economy, it will help with the transition in farms from older growers to the next generation. The fund can provide, according to Penny, “an innovative solution to allow a wider segment of those looking to care for the land an opportunity to plant roots and for a wider audience to support this mission.”

As we’ve seen in recent years, farming can take many forms. There isn’t only one right way to farm. Agriculture is ripe for innovation and growth in diverse practices.

With the rise of the local foods movement and a philosophical shift in people desiring to know more about where there food comes from, this kind of network can help farmers throughout the region meet modern market demands. In turn, this program will likely benefit the communities adjacent to them.

Note: If you would like to contribute to this fund, check out SMIF’s website,, and go under the “community foundation and designated fund giving” link under the “philanthropy” tab on the home page.