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V O L . X X I V N O. V I I A P R I L 2 , 2 0 1 8 22 B A N K I N G / F I N A N C E F O C U S consumer interest in locally sourced foods. Older farmers are retiring, mean- ing farmland is available. ere are new, ever-more sophisticated technologies for farm equipment and infrastructure. In Van Buren, Aroostook County, LaJoie Growers LLC produces 17 million pounds of vegetables a year from 1,300 acres. Jay LaJoie, a fi fth- generation farmer, used Farm Credit East for a loan to help fund a $1.1 mil- lion investment in cold storage. Farmers also need operating capital on a regular basis. As LaJoie explains, yearly operating loans, acting as bridge loans, are essential to his operation. "An operating loan is a big-ticket item that allows us to have funding until we can harvest our crops and turn them into money," he says. "In the spring we'll purchase seed for the year, and fertil- izer, chemicals or other inputs. We have labor, fuel and equipment maintenance. In the summer, we need fungicides and other crop protectants. In the fall, we start harvesting and we have extra labor and equipment maintenance. We put our products into storage, so we have energy costs for storage. ose are all expenses we incur before we can actu- ally turn our crops into money." To address the seasonal fi nancial challenges, LaJoie has diversifi ed his product line, off ering fresh and pro- cessed products as well as seed pota- toes, stretching sales to 11 months of the year. Still, market fl uctuations and expenses incurred all at once make operating loans necessary. In addition to the year's usual cycles, the need for fi nancing is also aff ected by uncoop- erative weather, market fl uctuations, crop disease and infl ation. Flexibility in lending To accommodate all the needs of farmers, there's a broad fi nance sec- tor, with government, nonprofi t, and cooperative and commercial banking entities. Loans and grants range from thousands to millions of dollars, serv- ing businesses throughout the sup- ply chain, from farms to processors, aggregators, distributors and value- added operations. Finance programs targeted for agri- culture are considered essential for the success of both the agriculture industry and the fi nance industry. at's because it takes a close understanding on the part of fi nance providers of the risks inherent in agriculture. Finance provid- ers range from the U.S. Department of Agriculture and the Maine Department of Agriculture, Conservation and Forestry, to nonprofi ts like Coastal Enterprises Inc. and Finance Authority of Maine, to Maine's largest agricul- tural loan provider, Farm Credit East, which provided $919 million in loan commitments to Maine agriculture in 2017. Some banks, like Machias Savings, have dedicated agriculture loan programs; many do one-time farm-related loans. Programs vary in things like interest rates, approval peri- ods and payback structures. "Each loan program has its own criteria and defi nition of who they will work with," says CEI's Harris. Bullish on ag Providers say borrowing is on the increase due to factors like start-ups, transitions and climbing capital expenditures. Maine is one of the few states with growth in farming, says Farm Credit East's Presque Isle branch manager, Peter Hallowell. » C O N T I N U E D F RO M P R E V I O U S PA G E WWW.BOWMANCONSTRUC TORS.COM (207) 368-2405 Your Commercial Building Solution BANGOR FEDERAL CREDIT UNION With generations of experience in the construction management field, Bowman Constructors offers value and service for a wide variety of projects throughout Maine. The diversity of our work and the specialized needs of our clients demands the ability to adapt to individual project conditions with innovative solutions and results — this is what we do at Bowman Constructors. To learn how we can bring our design/build expertise to your project contact us, today. — Kevin Bowman, Brian Bowman An award winning, family- owned, general contracting firm since 1987 F I L E P H O T O / K E N L A M B Jay LaJoie of LaJoie Growers worked with Farm Credit East to help fund a $1.1 million investment in cold storage, which in turn generates revenue in more months of the year. Andrew Silsby, President & Chief Execu ve Officer Open our Premier Checking (business or personal) today and you'll support our local community. We target 10% of our income each year to go back to the communi es we serve. Doing business with us really does make a deposit back into our community. Banking with us makes a deposit back into the community." " Suppor ng Community We Make It Easy www.KennebecSavings.Bank Augusta (207) 622-5801 • Farmingdale (207) 588-5801 • Freeport (207) 865-1550 Waterville (207) 872-5563 • Winthrop (207) 377-5801