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The very first Vermont Farm Fund loan, an emergency loan made in the wake of Tropical Storm Irene to Aaron Locker of Kingsbury Market Garden, was paid in full in mid-September, nine months earlier than required by the loan agreement.
When asked why he would pay back an interest-free loan before it is due, Locker said, "It is toward the end of the season and I have the cash flow that enabled me to pay the loan back early. I like the idea that the farm fund is about farmers lending to farmers. I know that by paying the loan back when I can rather than when I was required means that it will enable another farmer that needs help to get a loan more quickly. If I had the same interest-free loan from the bank, I probably wouldn't pay it back any sooner than necessary."
The Vermont Farm Fund is a revolving loan model so that the money paid back by Locker and other borrowers is loaned back out to another Vermont farmer or food producer. As a result, over $220,000 in loans have been made since the inception of the fund in August 2011, exceeding the initial funding of $160,000.
The fund is a partnership started by Craftsbury farmer Pete Johnson, who received significant donations from individuals and organizations after his barn burned to the ground in January 2011, and the Center for an Agricultural Economy, a nonprofit that shared his vision and provided infrastructure and guidance. The Vermont Farm Fund made its first series of loans to farmers who suffered losses from Tropical Storm Irene.
Johnson explained, "I wanted to pay forward the generosity that I received by seeding a loan fund for other Vermont farmers with 'repayments' of the contributions I received in my time of need. Aaron's eagerness to pay his loan back early so that others can use the funds is just the kind of spirit I hoped for when envisioning this lending community."
Emergency loans are offered for $10,000 and the terms are for two years with no interest. Three percent amortized interest is charged for Innovation Loans that are also available to Vermont food producers. Recent loans include three $10,000 Innovation Loans: Stony Pond Farm in Enosburg Falls borrowed money to grow their herd of beef cattle; Under Orion Farm in Cabot took out a loan to build a high tunnel greenhouse, upgrade its farmstand and washhouse for incubating farmers; and Tangletown Farm of Glover used its loan to buy a hammermill to custom grind its own feed rations for their meat animals.