Sustaining Far Western North Carolina Farms through Financial Education
Strengthening Skills for 21st-Century Mountain Agriculture

In the far western corner of North Carolina, many mountain farmers first recognized the need to change production and marketing practices in the late 1990s. Burley tobacco quotas were being dramatically reduced and tobacco’s guaranteed prices and simple auction system were giving way to specialty crops and direct marketing.

In 2003, Tammara Cole understood that as agriculture was changing, so too would the skills farmers needed to succeed in operating a farm. This young assistant area agent for the North Carolina Cooperative Extension Service, working on the Cherokee Reservation of the Qualla Boundary, submitted a grant request to the North Carolina Tobacco Trust Fund Commission to help implement a program to teach farm financial planning for tobacco-dependent families. The funded program serves a six-county region comprised of Cherokee, Clay, Graham, Jackson, Macon and Swain counties, as well as the Cherokee Indian Reservation.

According to Cole, the basic mission of the farm financial planning program has three objectives. The first is to help people become accomplished at managing their finances in business and at home. Second is the belief that in providing this training, the program helps reduce the stress of farm business management.

“In addition to all the other stressful things that go into farming,” says Cole, “these folks have to worry about how to file income taxes, keep accurate accounts and keep an accurate eye on cash flow.”

Finally, the program strives to help people become sustainable in their small farming businesses.

“With tobacco you didn’t need to know about marketing, shelf life or food-safety regulations. Now as farmers make the transition to other types of production – like specialty vegetables, small fruit and Christmas trees – they have to have these types of skills to succeed.”

Overcoming barriers to success

Mary Janis, who operates a certified nursery near Hayesville selling native plants and botanical herbs, was among the first to enroll in the program.

“This course really helped my business,” Janis asserts. “Before I was introduced to QuickBooks, I didn’t understand money flow. After taking the class, I was able to understand exactly how money was being spent in my business.” Janis says the course taught her how to set prices and budget for things like advertising.

“Because of this program, I’m in my third year of business and I produced a good profit last year. That’s hard to find in new businesses like mine.”

Cole says there are no requirements for enrollment in the program, but first preference in selection is given to tobacco farmers, followed by farmers who have been working in agriculture the longest, then second-generation farmers and finally new or beginning farmers.

In the first year of the program, Cole enrolled 25 farm families in an intensive three-year training program to learn about the importance of proper finance management. Of that number, 22 participants who stayed with the program received personal data assistants (PDAs) with QuickBooks accounting software. Seven PDAs were also given to far-western agricultural agents so that after the course work is finished they could continue to provide support to participants.

Through the course, instructors, including Cole and guest lecturers, cover sections on cash-flow analysis, tax preparation, asset depreciation and basic farm accounting. In addition, lecturers touch on aspects of budgeting for marketing expenses, how to deal with the complex web of farm labor laws, farm-safety training and bookkeeping.

Cole thinks one of the best things about the program is that it isn’t taught in a formal classroom setting, but at community centers and meeting places already familiar to participants. Each series of classes is held in at least three different locations throughout the area. For the first series, classes were held in Hayesville, Robbinsville, Sylva and Franklin. The second series of classes has been held in Andrews, Sylva and Franklin and on the Cherokee Reservation.

“Hopefully, most anyone in the far west can get to a class within 30 minutes to an hour,” says Cole.

“This program provides a nontraditional way for [farmers] to learn what they need to know about their finances without enrolling in a community college course or attending a formal educational environment,” she says. “We keep the environment casual and fun, but at the same time we make sure folks are learning.”

Janis says the course has also helped her not to be intimidated about preparing taxes and with how to keep accurate business files up to date. “Tax time has always been a real pain for me,” she explains. “But because of the class, the last two years I’ve been able to prepare my taxes in just a couple of days.”

Learning to use the power of computers has also paid off for Janis. “The PDA they offered really helps me out. I can use it while making sales, and keep accurate inventory every day.
“I went from having my savings account pay for my nursery to having my business pay for itself.”

Cole says running a grant-funded educational program has been a learning experience, and she’s had to adjust certain aspects of the program to get maximum benefit from the effort. For instance, she says, initially the program had no fee requirements for attendance. “I had some no-shows. So for this year, I asked people to send in a $25 registration fee.” For that $25, participants receive $150 of teaching materials and software. And when they complete the class, they are eligible to get a reimbursement for accounting services provided to their businesses.

Stretching grant dollars to serve more

Now in its fourth year of operation, the program today offers shorter courses targeted at addressing the immediate financial-education needs of farm-based families. Classes are scheduled around the busy schedules of participants, many of whom are working on their farms and in full-time jobs.

At a recent Friday morning course being held at the Boy’s Club of Cherokee, Cole was teaching about asset depreciation.

“Okay,” says Cole, addressing the class of six women and one man, “so we’ve got a $40,000 tractor that has a depreciation life of seven years. Let’s open our calculators on QuickBooks and work out a straight-line depreciation schedule.”

After several minutes of learning how farm investments are depreciated on taxes, smiles of understanding indicate several students clearly grasp the concept.

“I can’t believe I’ve been paying an accountant all those years to do something so simple,” says one student, laughing.

So far, Cole says, 69 individuals from 43 families have participated in the farm-financial planning program. Some 75 percent have completed the course. Many of these are embarking on new farm activities.

“I have never met a farmer who is not planning, changing or expanding their operation,” say Cole, the daughter of a Henderson County apple grower. “I would say one half of the farmers I have worked with over the last three years have tried new crops or changed their production in some way.” Cole estimates that participating farmers have as many as 4,000 acres of cumulative farmland under production.

The original program plan was to provide three years of training for a set group of farm families. But by being frugal and keeping expenses to only those things absolutely essential to the students, Cole has been able to extend the program a year beyond what was anticipated in her original grant request. “A hundred percent of grant funding goes to the benefit of the students,” she says. “Now I’m hoping we can offer it once again in 2008.”

Cole says her reason for implementing the program was simple: “I applied for support for this because I wanted to do things that I knew [the Extension service] didn’t have the budget for.”

True to her mission as a financial trainer, Cole has demonstrated tight fiscal management while implementing the program. “I always try to make money go a long way.”

Tobacco Trust Fund Commission executive director William Upchurch says his board is pleased to see innovative programs led by young agricultural professionals. “As one of the youngest project managers for a Tobacco Trust Fund grant,

Tammara is commended for her willingness to jump in with both feet to help her community.”

Perhaps as important as anything, the program has served to let local farmers know how important financial management is to their success. Janis says she would encourage anyone who wants to successfully run a farm business to receive education in financial management.

“If they can’t understand where their money is coming from and where it’s going, they are not going to succeed in business. Once I took this course on farm financial planning, everything clicked.”