Letter to Secretary Tom Vilsack, U.S. Department of Agriculture, and Administrator Karen Gordon Mills, Small Business Administration - Hops Industry

Letter

Today, at Climbing Bines Hop Farm in Penn Yan, NY, U.S. Senator Charles joined local Yates County hops farmers to announce a two-pronged plan to help the hops industry grow in Yates County and throughout the Finger Lakes. First, Schumer urged the US Department of Agriculture (USDA) and Small Business Administration (SBA) to provide low-cost financing programs that provide start-up capital in the form of loans to small businesses and also to partner with Cornell Cooperative Extensions New York State Hop Program and several regional hops growers led by Climbing Bines in an effort to find federal funding for a $50,000 harvester.

Second, Schumer urged passage of the Farm Bill, which passed the Senate last month, and would fund two key provisions to provide aide to hops growers. Schumer noted the first component, the "National Clean Plant Network," provides hops growers with access to disease free root stock, to prevent the spread of crop disease and invasive species that have plagued hops plants in other states. The second component, the "Specialty Crop Research Initiative," would allow Cornell Cooperative Extension to continue its New York State Hop program to help current and prospective hop farmers with site selection, improving hops quality to make their crop marketable to brewers, pest management and more. Schumer urged the USDA and SBA to support this industry and highlighted that without passage of the new Farm Bill, the National Clean Plant Network will not be fully funded, and the Specialty Crop Research Initiative would not be funded at all.

"The hops industry in the Rochester-Finger Lakes, especially in Yates County, is poised to take root and thrive, and I'm urging the Department of Agriculture and U.S. Small Business Administration to support this resurgence with the necessary capital financing," said Schumer. "Federal loans and loan guarantees will help grow Finger Lakes hops during a formative time and establish the region as a leading hops producer for craft brewers in New York and other neighboring states. Also the recently-passed, bipartisan Farm Bill has two key provisions that would give meaningful federal assistance to hops growers, so I will keep my foot on the gas to get the House to pass it. New York is home to a burgeoning craft brewing industry, and with the right financing and assistance, we a can grow a local hops industry ready to serve local craft breweries and give a real boost to tourism in the area."

"The USDA Specialty Crop Research Initiative and the National Clean Plant Network have been vital to support Cornell Cooperative Extension's work to grow the hops industry in New York and we thank Senator Schumer for his support," said Steve Miller, Cornell Hops Specialist.

New York State has a long history in hops production. Hops farms bloomed between 1830 and 1849 to the point where New York became the national leader in production. By 1855, the region was raising over three million pounds annually and was responsible for 85 percent of all hops in America. This strength gradually declined due in large part to blight, changing climate conditions, competition from drier states in the Pacific Northwest, and Prohibition. As a result, the bulk of hops production shifted to small farms and home breweries, where it remains today.

Schumer was joined by Chris Hansen and Brian Karwec, and Matt Klehamer the owners of Climbing Bines, and the Cornell Cooperative Extension's NYS Hops Program Specialist Steve Miller. Also, Schumer welcomed growers from other Finger Lakes Hops farms including: The Whipple Brothers Hop Farm, Hop Meadows, and Bluebell Hop Farm and local officials. Schumer today vowed to fight for critical federal financing that will provide low interest loans or loan guarantees to these local farmers. Specifically, Schumer said he will personally lobby for the groups in pursuit of the financing opportunities from the following federal programs:

· The SBA's traditional 7(a) loan guarantee program, that provides a federal guarantee for loans made by SBA-approved lenders;

· The SBA's CDC/504 loan program, that provides financing for small businesses to purchase equipment;

· The SBA's venture capital program that leverages private capital raised by SBA-licensed Small Business Investment Companies with federally-backed loans;

· The USDA's Farm Service Agency's "Farm Ownership" loans, a direct loan program that provides farmers the opportunity to purchase farmland, construct and repair buildings and make farm improvements;

· The FSA's loan guarantee program, which will guarantee up to 95 percent of loans made by participating banks, credit unions and other lenders, to make credit available to farmers who would be unable to obtain sufficient credit without the guarantee.

Schumer is also pushing for passage of the Senate Farm Bill, which received broad, bipartisan support when it passed the Senate last month. A House version of the bill failed last month. Schumer specifically pointed to two provisions in the Senate bill that would be a boon to upstate hops growers:

Schumer noted that the Farm Bill will provide permanent financing for the Clean Plant Network and increase its funding to $60 million. The funding would go to ensuring Upstate Hops famers can purchase disease-free root stock. Without this program, growers would be left to purchase new hops plants from out of state distributors that could be infected with invasive diseases. Schumer warned that with crop diseases, the chances of spreading are great. Planting diseases hops has the potential to unleash those diseases across New York. Hops can be very susceptible to diseases like powdery mildew or Downey mildew. For example, Hops Stunt Viroid is an Asian invasive disease that came to the West Coast on contaminated plant material and infected hops plants from farms in Washington State and Oregon. It can reduce yields by as much as 65% and can decimate a hop farm. Schumer highlighted that through this program, Cornell's New York Hop Program has placed approximately 4,000 hops plants at hops farms in the past two years and is expanding its variety of offerings next year.

Schumer also pointed to Cornell's New York Hop Program, which was established in 2010 through over $150,000 in grants from the USDA Specialty Crop Research Initiative, as an example of what can grow out of this funding provision. The Cornell program relies on this funding initiative to support their programs, education, and outreach to current and prospective Hops farmers. The funding from the initiative has enabled Cornell to help growers with site selection, improving hops quality to make their crop marketable to brewers, pest management control, crop processing, harvesting techniques, technical assistance, and more. To produce a quality crop economically, New York growers need hop varieties that are suited to thrive in its specific climate, as well as better tools for insect and disease management. That's where Cornell faculty and extension specialists come in, Schumer continued. The initiative will only be funded if the Farm Bill is passed; the current 1-year Farm Bill does not include funding for this program at all. Schumer pledged to fight to extend the program, and in turn, support Cornell's next application if it passes.

Climbing Bines is currently one of the largest hop farms in New York State with over 1,650 hop plants, known as "hills," planted. Climbing Bines has sold its hops commercially in the past and has plans to use its hops in its new expanded on-farm brewery and tasting room which is slated to open on August 1, 2013.

Schumer emphasized that New York has a burgeoning craft brewing industry, and that he has prioritized finding ways to support local sources of hops for those breweries.

A copy of Sen. Schumer's letter to the USDA and the SBA appears below:

Dear Secretary Vilsack and Administrator Mills,

I am writing to bring to your attention an exciting opportunity in the Finger Lakes region of New York -- an opportunity that, like so many others, is in need of capital to come to full fruition. That opportunity is the development of New York State as a leading hops producer for craft brewers in New York and other states in the region, and I respectfully ask you both to work with me to explore all available alternatives to allow fledgling hops farmers in the Finger Lakes region and beyond to finance the capital investments necessary to establish a viable hops industry in New York State.

New York was once the leading supplier of hops to US beer producers. New York once had 800 acres of hops, then became nonexistent due to Prohibition and has only recently started to recover, reaching approximately 130 acres this past year. Moreover, the Finger Lakes region is well-positioned to lead the resurgence of New York's hops industry: it's in close proximity to major upstate New York cities and many of the craft breweries springing up across the region that would benefit from local hops suppliers, plus it complements the well-established wineries and artisanal food industry that is the hallmark of the Finger Lakes Region. Moreover, the soil and climate also create a supportive environment for growing hops, and the development of a vibrant hops-growing industry in the area will give a real boost to tourism.

Recognizing this opportunity, Cornell Cooperative Extension has establish a first-ever New York Hop Program whose mission is to not only provide technical help to grow New York's hops industry, but to help growers overcome a myriad of challenges including financing expensive equipment and new plantings. These upfront costs can run as high as $100,000 for new equipment for a mid-sized farm, and as much as $13,000 per acre to prepare the land and complete a planting. One particular hops grower, Climbing Bines in Yates County, NY is working with several other growers to seek suitable financing for a $50,000 mobile harvester.

Accordingly, I urge you both to explore every option to help Cornell Cooperative Extension and the growers it works with to access the capital necessary to get this budding industry up and running across the Finger Lakes region.

Thank you for your consideration. I look forward to working with you to ensure that this new agricultural business opportunity in New York has every chance to succeed.

Sincerely,

Charles E. Schumer

U.S. Senator

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