Maryland Agricultural and Resource-Based Industry Development Corporation

Dorchester County Presentation - 7/18/13

Stephen McHenry, Executive Director

“Mar_BID_Co” “Is a Rural Development Financial

Intermediary Org. Serving All of Maryland”

With a focus on:- Farming- Forestry- Seafood- Aquaculture

Situation Today Resource-based industry important to

all of Maryland More than just economics: Every

Marylander needs to have adequate food (and shelter, water, energy, etc.) – most of which is provided from resources from rural areas.

Situation Today (Con’t) Half the State’s land area is privately

owned rural land (3 million acres +) Ag/RBI important to culture, heritage,

tourism and quality of life. Resource-based industries underpin

the economies of many rural counties.

* Especially in Western Maryland and the Eastern Shore (one-third of economy).

Top Ag/RBI Business Development Concerns Access to

affordable credit and capital

Information/referral/business planning

Help for young/beginning/ diversifying farmers(and watermen)

Loss of rural land

MARBIDCO Partners Commercial Banks & Farm Credit

System State Agencies (MDA, DNR, DBED, MCE, MEA,

TEDCO) USDA (and other Federal Agencies) Rural regional development councils Local economic development offices Farm and commodity groups Rural industry associations MD Ag Land Preservation Foundation Foundations and local land trusts

Business Activity for MARBIDCO Includes:

Food production and processing, including:- commodity crops- table crops- seafood & aquaculture

Fiber prod./processing:- timber/wood products- lumber, pallets, floors, paper and pulp, etc.

Renewable energy- farm solar & biomass

Results – In Our First 6 Years.... Since 2007, MARBIDCO has made

investments in 238 agricultural and rural businesses totaling about $19 million.

Partnered with 17 banks and 3 local government revolving loan funds, with a leverage of $36 million in bank financing.

Helped 78 young or beginning farmers.

Helped to finance 88 farm value added processing projects.

Results – For Dorchester County Funded 34 Rural Business Project

Investments totaling $3.75 million since 2007(About 20% of all MARBIDCO investment $$$.)

Secured Lending (MRBIFF and Working Capital Loans) – 16 projects ($2,750,000)

Small Value Added and Local Government Cost Share Grants – 6 projects ($25,000)

Shellfish Aquaculture Loans – 12 projects ($765,000)

MARBIDCO Loan Programs

MARBIDCO Offers 8 Lending Programs today 5 of the loan programs are offered using

MARBIDCO resources – these loans require collateral security

3 other loan programs are for special purchases and involve a higher level of credit risk (unsecured lending)

The “workhorse program” is the Maryland Resource-Based Industry Financing Fund Loan (MRBIFF)

NOTE: All loans reviewed and approved by a loan review committee.

Maryland Resource-Based Industry Financing Loan Fund

Offers low-interest (3% APR initially) loans for the purchase of land and capital equipment.

Maximum Loan Amount - $200,000 ($400,000 for land purchase & $600,000 for a major project).

Financial commitment:• A commercial lender and/or a public

instrumentality must have an equal commitment in the project.

MARBIDCO will accept a junior lien position in most situations.

Benefits to using a MARBIDCO “MRBIFF” loan

Complements the financial services offered by commercial lenders by helping to make rural business “gap” financing both available and affordable.

Flexible loan terms to match and enhance commercial lender offerings.

Other Loan Programs Rural Business Equipment & Working Capital

Loan FD Maryland Vineyard Planting Loan Fund Forestry Equipment and Working Capital Loan

Fund Rural Business Energy Efficiency Improvement

Loan F Maryland Shellfish Aquaculture Financing Fund Maryland Remote Setting Aquaculture Financing

Fund Agricultural Cooperatives Equity Investment

Fund

MARBIDCO Grant Programs

Grant program offerings in 2013:

Local Government Ag/RBI Project Cost Share Program

Maryland Value Added Producer Grants (Capital Assets Option & USDA Matching)

NEW: Urban Ag Commercial Lending Incentive Grants (in municipalities)

What does “Value Added” mean?Product has incremental value realized by the producer as a result of: Change in physical state Differentiated production or

marketing Product segregation Economic benefit realized from the

production of farm or ranch-based renewable energy.

Rural Land Preservation Facilitation Services

Installment Purchase Agreements (IPAs), in partnership with MALPF.

County Leveraged IPAs and Aggie Bond/Option IPAs.

Next Generation Farmland Acquisition Program (Pending Transfer Tax $$$).

www.marbidco.org

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