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Marketing firm serves as 'middleman' for farmland leases |
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By MONETTE TAYLOR | South Central Texas Edition |
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August 29, 2002 -- "It's our belief, one of the foundations of our company, that family farms exist because they are ... without a doubt ... the most cost effective way to produce out there. They're heavily invested in that fact and they work very diligently for it," said Ben Allen, founder and chief executive officer of the Austin-based New American Farm Ventures (NAF Ventures). NAF Ventures evolved from RWA Financial Services, which was formed by Allen's father about 23 1/2 years ago. The company provides marketing and other business assistance to farmers in 27 states. The new NAF Ventures has added a new twist to the family business - one that puts farmers' land to use for research, and money in their hands. "We have watched the landscape of agriculture change, aggressively. Corporate America took over poultry in the '60s. We watched Corporate America take over the pork production in the late '80s, early '90s. We've watched Corporate America step, aggressively, into cattle ownership, or what they term as 'cornered cattle production,' in the late '90s and early part of this decade," said Allen. He believes it would be a "major mistake" for producers to believe that the same type of "take-over" can not happen to family farmers. He feels it is important for the survival of family farms to take interest in what is happening around them as most cannot compete with the large, commercial farms, and many have already been driven out and off the family farms. What Allen is doing is working as a "middleman" between the Corporations and the family farmer. "We take capital from wealthy individuals and buy farm lands in cash, and then we contract farming," he said. The major focus is making NAF Ventures available for Corporate America, as well as academia, to contract work through the Venture. "We believe that we're the only firm in the nation that could fill 100,000 acres worth of contract in demand inside of four months," he added. Allen said professors in universities, such as Texas Tech University, the University of Texas, and A&M University, who do genetic research are always needing land for trial test plots. It is hard for them to go out on "cold calls" to look for these farms, but it is not for Allen. By acting as the middleman, he is able to quantify and qualify farmers that match the needs of these groups. "They (universities/corporations) don't go in blind, wondering who this guy is. They go in knowing what this guy (farmer) looks like, financially, what his land picture is, and they get to meet with their people and they get to know that that is a much more qualified relationship," said Allen. As he said, family farmers would have a hard time going to universities and/or corporations offering their land for research projects, but by going through NAF Ventures, the matches are made with little problems and benefits for both parties. "Through my family's business that has been up and running for 23 1/2 years, we have hundreds of relationships throughout the United States on hundreds of thousands of acres of farmland, with clients we've worked with for years," he said. With the cultures of Corporate America and farmers being so different, Allen feels he is able to bridge the gap by helping each understand just what is happening and what the plans are. "The first time during those situations can be expensive tuition, if you're not careful and they (farmers) understand that very well. As successful businessmen, they've been through a lot of new business situations and understand that the first time can be expensive if you don't know what you're doing!" said Allen. Probably the most exciting new prospect for the latest partnerships involves the pharmaceuticals business and crops. According to Allen, the businesses have developed a protein in genetically modified corn that can be used by cystic fibrosis patients, and others are being studied in more depth all the time. "It's become apparent that protein product for the pharmaceutical industry is important. The 'baby-boomers' generation is using medications at a volume never before seen in this world," added Allen. While this "bio-tech" farming is new, many farmers decide the additional money it provides is enough incentive to give it a try. "Quite frankly, it comes down to 'is the money worth the risk' as in any business," said Allen. "The Wall Street Journal calls it the 'golden age' of agriculture that is dawning, now. It has nothing to do with the family farmer and everything to do with the commercialization of all the research and development money that's been spent over the last few decades by Corporate America on farming applications." While the general public knows little of the positive side of bio-tech farming, many are afraid of the unknown and/or changes in productive farming. "They can produce those proteins, that are so important (for cystic fibrosis), up to 90 percent cheaper than they do it in the factories. It does two things: it lowers the cost of the drugs for the patient, and it increases the supply of the drug, overall," he added. Until the public begins seeing more "tangible" benefits, Allen believes the bio-tech industry will move more slowly than desired by patients and Corporate America. "The FDA and USDA are both doing a very good job of catching up with the science. The science leapt ahead of them, which is what happens, historically," added Allen. The "ideal" farm (for Allen to work with) is about 1,000 acres, financially stable and at least a decade away from retirement, "so there is continuity." The size of the farm can be important, especially, in bio-tech crops where there is a requirement of how close to other crops they can be planted. Fees are paid, according to risk, said Allen. Crops currently being farmed include corn, soybeans, wheat, cotton, milo and some rice, although the rice farmers were hurt when the Cuban trade was cut off. "The core ability of America's family farming is cost efficient, quality production," said Allen, and that is what Corporate America needs, now, he added. The hardest part of the business, now, includes the commercialization of genetic technology and Corporate America and farmers learning to deal with each other, on a level playing field, and to benefit both parties, he said. The best part of the venture is what keeps Allen running. "I believe that God still builds arks. I believe that floods still come in various varieties, and I believe that most of us don't hear the call," said Allen. With the company motto - "we are not afraid" - in mind, Allen said he plans to contract 800,000 acres and help "save" 450 farm families who should be able to show a good profit from the venture. While this is a good start, and it makes him feel confident the plans will work, it makes him feel sad, too. "It's also my biggest guilt. I wish that the number was bigger," he said. (Ben Allen can be contacted by e-mail, ben@farmrwa.com) |
