LONDON, Ohio – The buzzword “value-added” has dominated farm profitability conversations for at least five years, but few have been able to figure out how to line their pockets with a buzzword.
A new organization starting up in Ohio is hoping to develop the links between ideas and profits, and to give farmers the opportunity to grab more of the investment returns.
Sen. George Voinovich announced the creation of the Heartland AgVenture Association Sept. 18 during the Farm Science Review. The enterprise is a joint effort of the Ohio Farm Bureau Federation and Ohio State University, with the goal of becoming a stand-alone association.
Representatives from the Edison BioTechnology Center, Battelle, and the USDA’s Rural Development agency have also participated in the venture’s start-up.
“When we get more dollars into our towns and villages, more profits mean more jobs and stronger communities,” Voinovich said.
What is it? Basically, Heartland AgVenture will reduce the risk of a start-up business.
The goal of the new ag initiative is to serve as a clearinghouse for ideas for new ag ventures, provide feasibility studies for the best ideas, then help idea “owners” develop business plans, secure funding and work with manufacturers or processors to bring the idea to market.
Any member can submit an idea for consideration by the association’s board.
“All of the ag resources are there to evaluate and commercialize an enterprise,” said Mike Pullins, vice president for business services with Ohio Farm Bureau, which is providing administrative services for the organization for one year.
“Time is money,” Pullins added. The new organization will offer the “efficiency and productivity to bring ideas to fruition.”
Heartland AgVenture members have the opportunity to invest in an idea – and share in the profits.
“The first rights to invest in an idea is the best opportunity for a farmer,” Pullins said. “This means he’s kind of an ‘insider.'”
The association hopes to be able to leverage membership funds with public and private dollars as well as venture capital sources.
Rural economic development. Ohio’s economic development policies have typically emphasized manufacturing entities, said Randy Hunt, state director of the USDA’s Rural Development in Ohio. And, while agriculture remains the backbone of rural communities, “the rural economy has diversified so much in the last 25 years,” Hunt added.
“This (effort) helps shore up one of our rural foundations,” Hunt said. “It gives producers an opportunity to grab hold of that profit stream.”
Won’t boost corn prices. The twist with this effort, say organizers, is that its goal is not to increase the price the farmer receives for his commodities. Instead, the project gives farmers an opportunity to receive additional returns by investing in value-added agricultural businesses.
“If you look at the farm as an investment portfolio, this gives them an opportunity to take that portfolio one step further,” said Deborah Rausch, a rural development specialist with the USDA in Columbus.
“It’s a self-help, bootstrap kind of operation,” said Ohio State ag economist Tom Sporleder, who has helped spearhead the concept. “It gives farmers an opportunity to get income out of the market from changing their own products.”
He likens the concept to raising hogs to have an alternative for marketing corn, rather than just selling it on the commodity markets.
Who can join? Membership is not limited to farmers; any individual, corporation or association can join. Producer members pay an initial $800 membership fee, plus $200 annual dues. These members have the right of first refusal in investing in projects.
Corporations with sales above $25 million pay a $5,000 initiation fee; corporations with sales below $25 million pay a $2,500 fee. Organizations pay between $500 and $5,000, depending on membership.
More information is available on the association’s Web site, www.heartlandagventure.org, or by calling Sporleder at 614-292-0315 or OFBF’s Pullins at 614-249-2421.
(Editor Susan Crowell can be reached at 1-800-837-3419 or at firstname.lastname@example.org.)
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