Learning the Business of Farming

A group of Molokai farmers were looking to cultivate something beyond bananas and broccoli on Nov. 20: their business and marketing abilities. About a dozen local farmers and ranchers gathered at Hikiola to attend the Agriculture Business Development Training workshop to refine their skills at winning customers and securing funding.

With the county moratorium on genetically engineered crops currently on hold, many farmers are uncertain about the possible effects on their businesses. Although the workshop’s guest speaker, Nicole Milne, didn’t have concrete answers, she said laying out and following smart plans will keep farmers on the right path.

“I feel like people’s goals for their businesses and their farming ideals are fairly secure,” said Milne, associate vice president for programs for The Kohala Center, a Hawaii Island-based research and education organization. “People have their beliefs and they’re farming to them.”

Finding the Money

As Molokai resident Ivan Kawamae prepares to start his own farm, he said that the initial finances required present a challenge.

“It’s not [my] first time attempting to do business, it’s just the hurdles that we gotta cross over,” said Kawamae. “… It takes money to make money.”

Milne agreed that finances can be a headache, both for beginning farmers and those already in the business. Many farmers seek grants because, unlike loans, they don’t require repayment. However, Milne said she far prefers loans, as grants involve a longer, more complicated application process and “have a lot more strings attached.”

“If you have any faith in your business, you should be able to take out a loan, because you should have your product sold before it’s planted in the ground,” she said.

Some available loans include the Kahiau Rural Business Development Microloan Program, which is in its pilot stages. New, kama`aina-operated businesses that reflect the program’s values are eligible for loans up to $15,000. Another option is Kiva Zip, an online lending site that allows people from around the world to fund businesses.

Ultimately, Milne encouraged farmers to not be afraid to seek financial advice.

“People know how to do it,” she said. “They’re experts at it. Don’t kill yourself trying to do it.”

Visions of Success

Running a farm also involves a clear business plan, which helps convince lenders to invest in one’s farm, according to Milne. Seeking investment advice from experienced professionals can further enhance the viability of the farm, ensuring that all financial decisions align with long-term growth and sustainability goals. This guidance can help farmers navigate market fluctuations and optimize their resources for maximum profitability.

“It’s a really hard business to get into and you need a lot of capital,” she said. “… Having that business plan helps beginning farmers be able to succinctly say what their plan is and apply for funding.”

Milne went on to explain that a business plan should include the company’s vision and mission, as well as its goals and strategies in case of failure. The plan should address external factors, such as the demographics of the market that the farmer wants to enter, as well as internal factors, such as the required equipment and the planting and harvesting schedule of each crop.

Kuulei Arce, a local farmer and Maui Economic Opportunity business instructor, said she was glad to see that Milne teaches nearly the same format for business plans as the one Arce uses here on Molokai.

“For me it felt good, like we’re on the right track,” said Arce, who recently graduated a farmer business class that included Kawamae. “We’re helping people with the right items.”

Getting Creative

Milne encouraged farmers to find out what’s unique about them and their products.

“Consumers buying your product want to hear your story,” she said. “… If you’re gonna spend so much time on the farm growing something, you need to think about how you’re going to market your product.”

Business owners can tell their stories through clever slogans, eye-catching logos, or short paragraphs on the back of the product packaging itself, said Milne. She told farmers to get comfortable telling their stories to the press and to be active on social media.

“Marketing is one of the hardest things that you can learn,” said local farmer William Kalipi. “It comes down to relationships with businesses. If you can keep [your products] quality, that’s it.”

Farmers can also explore innovative solutions like setting up portable fencing on their property to optimize land use and potentially increase sales. This could complement other strategies such as diversifying crops or engaging volunteers through programs like World Wide Opportunities on Organic Farms (WWOOF).

“As you see people that are happy living off of their land, they’re doing all sorts of things to make it work,” Milne said. “To not be afraid to diversify in whatever way that is, I think, is super important.”

For more information or technical assistance on business and agriculture, visit kohalacenter.org/business, or contact Nicole Milne at nmilne@kohalacenter.org.