Presented by: Steve McHenry, Executive Director, MARBIDCO

1. MEDA Presentation
Resource-based industry is important to Maryland
March 9, 2018
Steve McHenry, MARBIDCO Executive Director
WEBSITE: www.marbidco.org

2.  Resource-based industry is important to all
Marylanders – Food, Feed, Fiber and Fuel
(and also minerals)
 It’s more than just business and economics:
Every Marylander needs to have adequate
nourishment….and shelter, clean water, energy,
paper products, etc. – most of which (but not all)
is derived from resources extracted from rural
areas.
 Ag/RBI important to Maryland’s culture, heritage,
tourism and quality of life.

3.  Half of the State’s land area is privately owned
rural working farm and forest land (over 3.5
million acres, out of 6.3 million acres)
 Resource-based industries underpin the
economies of many rural counties.
* Especially in Western Maryland and the Eastern
Shore (perhaps one-third of the total economy).
 2018 Salisbury University economic impact of
Ag/RBI study found that there is a $20 Billion
impact ($23 Billion with mining & natural gas).

4. Row Crop Commodities
• Corn, Soybeans, Wheat, etc.
Table Crops
• Vegetables, Tree Fruits, Small Fruits. etc.
Animal Husbandry
• Dairy (milk products), Wool (sheep & alpaca)
• Meat: chicken, beef, goat, lamb, oysters, etc.
Urban Agriculture (small city plots, etc.)

5.  12,200 of farms on 2 million acres (Average farm size: 166 acres)
 Top Commodities:
1. Poultry
2. Grains (corn and soybeans)
3. Nursery, greenhouse, floriculture and sod
4. Dairy
5. Vegetables
 Economic Impact for the Food/Feed/Fiber sector in Maryland (2015)
totals over $20 billion to the State’s economy, including:
• Agriculture contributing $15.8 billion
• Forestry contributing $3.5 billion; and
• Equine contributing $1 billion
• Seafood and Aquaculture contributing $355 million
 Maryland also has strong expanding markets in local, value-added,
fresh produce, and organic products that capitalize on regional
demographics.

6. Is a Rural Business Development Financial
Intermediary and Instrumentality Serving All
of Maryland (Celebrating 10+ Years)
With a
focus on:
- Farming
- Forestry
- Seafood
- Aquaculture

7.  Access to affordable
credit and capital
 Help for
young/beginning/
diversifying farmers
(and watermen)
 Loss of rural land
 Aging workforce and
land ownership

8.  Commercial Banks & Farm Credit System
 State Agencies (MDA, DNR, Dept. of Commerce, MCE, MEA, RMC)
 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

9.  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
- some limited farm solar and
biomass financing

10.  Core Rural (and urban-edge) Business
Development – several loan and grant
financing programs that are funded as a
result of the Ag Stewardship Act of 2006
 Higher Risk Specialty Lending – loan
programs that are funded by partnering
organizations for targeted purposes (e.g., farm
energy efficiency and shellfish aquaculture)
 Rural Land Preservation Facilitation –
easement related programs that are funded from
transfer taxes or other funds (e.g., conduit finance)

11.  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.

12.  Offers low-interest (3.25% APR
initially) loans for the purchase of land
and capital equipment.
 Maximum Loan Amount - $250,000
($325-$450,000 for land purchase &
$500-$650,000 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.

13. 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.

14.  Rural Business Equipment & Working Capital Loan
 Maryland Vineyard Planting Loan Fund
 Forestry Equipment and Working Capital Loan Fund
 Rural Business Energy Efficiency Improvement Loan
 Maryland Shellfish Aquaculture Financing Fund
 Maryland Remote Setting Aquaculture Financing Fund
 Agricultural Cooperatives Equity Investment Fund

15.  Local Government Ag/RBI Project Cost Share
Program ($5,000 to $10,000, depending)
• Several Counties have participated over the years
 Maryland Value Added Producer Grants*
- USDA Matching (15%, currently closed)
- Capital Assets Option ($10K,currently
closed)
(*Must have been farming for at least two years)
 Urban Ag Commercial Lending Incentive Grants
($7,500, in municipalities or inside the beltways)

16.  A product that is value added has an incremental
value realized by the producer as a result of:
• 1) change in physical state
• 2) differentiated production or marketing;
• 3) product segregation
 Examples include: on-farm wineries, breweries
and distilleries, and creameries
– and for MARBIDCO only, certain secondary wood products
and seafood products capital equip. expenses

17. Installment Purchase
Agreements (IPAs), in
partnership with MALPF
(and counties potentially
too)
NEW: The Next Generation
Farmland Acquisition
Program ($2.5 million in FY 18
and hopefully $2.5 million in FY 19
and beyond).

18.  A rapid-response, farmland conservation easement-
option purchase program, designed to:
• help qualified young and beginning farmers who seek
to purchase farmland, but need some specialized
financial assistance to enter (or continue in) the
agricultural profession; and
• effectively preserve the agricultural land from future
development
 50% to 70% of the Next Gen funds are expected to
revolve because of future permanent easement sales

19.  MARBIDCO will pay up to 51% of the Fair Market Value
(FMV) of the agricultural land only (with a cap of
$500,000)
• The Program is designed to enable a commercial lender to also
make a loan to help with the purchase of a farm (and a
commercial bank or Farm Credit Association participation is
required all Next Gen purchases)
• The Next Gen funds will be provided as an equity down-payment
at a real estate settlement
 In addition, as part of this process MARBIDCO will take
an option to purchase the conservation easement (thus
extinguishing the development rights during the option
period)

20. Since 2007, MARBIDCO has:
 funded over 450 farm and rural business projects, with
$49.2 million in direct financing, in every county in
Maryland (and Baltimore City).
 Partnered with 20 banks and 4 local government
revolving loan funds, with a leverage of $133+ million in
bank financing (a 3.5 to 1 ratio).
 Helped over 250 young or beginning farmers.
 Helped to finance 161 on-farm value added processing
projects.