by Dr. Ridgely Abdul Mu’min Muhammad

"No, that won’t work! You just don’t get it. We are at war!" I blurted out this
statement in response to a statement by a young lady in the audience who had suggested to a farmer
that he seek "venture capital" funds to develop a processing facility for his co-op.

One of the Black farmers who runs a farmer co-op, had just given a presentation at the 7^th
National Black Land Loss Summit held on February 19, 2005 at the Franklinton Center near Tillery, NC
on how his co-op was faring even with a contract with a large hotel chain. He told us that he needed
other markets that he had more control over, because they could not afford for this hotel chain to
be their primary market.

Specifically he stated how they had sent up a load of produce that he knew was grade
"A". However, when the truck arrived at the central warehouse for this hotel chain, it was
turned away, supposedly because it was of inferior grade. The co-op was luckily able to divert that
shipment to another buyer, but he found out later that the hotel’s purchaser had over ordered and
to hide the fact, turned back good products from his co-op because they lacked market power.

In other words, although this chain agreed to purchase from the co-op, the unwritten rule in the
industry is that if you over order, you turn back products from your newest and smallest supplier so
as not to upset your larger historical suppliers. Therefore, so as not to be sued you subjectively
lower the grade of the product. Since food products are highly perishable, there would be no
evidence for the victim to show in court as to the quality on the day of delivery.

This farmer therefore advocated the position that Black Farmers and Agriculturalists Association
(BFAA) and we at Muhammad Farms take and that is, the Black farmer must control the product
"from the land to the man". We must develop independent markets with our "city
cousins" that would not play these purchasing games because they had our best interest in mind.
We as Black farmers would also have our "city cousins" best interests in mind and would
insure that we do not put any harmful chemicals on our produce or in our farm animals.

To set up such a processing and distribution system requires money. This is when the lady from
the audience made the comment about seeking "venture capital". This was at the end of a
long day of workshops where the issue of losing control of your farm operation and even your
personal life came about by borrowing money from the USDA.

We had talked about how our uneducated ancestors 45 years up from slavery had bought over 16
million acres of land by 1910 without borrowing money from the government or "venture
capitalists". However, it took the recent generation of college educated farm advisors to
convince Black farmers to "leverage their assets", the land, to eventually lose it to the
children of their former slave masters through foreclosures and tax sales.

One such victim of the USDA’s lending practices is Mr. Leroy Harvey. Mr. Harvey is eighty-nine
years old, a life-long farmer, who has accumulated several tracts of land totaling 300 acres.
Despite his age, he is forced to continue farming to maintain his land and home. Due to the
devastating effects of Hurricane Hazel, Mr. Harvey, like many other farmers in his position, took
out a loan with the United States Department of Agriculture (USDA) to save his farm. Even though the
value of the property may far exceed the amount of the loan, all assets immediately become
collateral for the loan repayment. This is the case with Mr. Harvey. Furthermore, the USDA is now
garnishing his deceased wife’s retirement pension which had nothing to do with his original loan.

"Venture capital" sounds high tech and progressive, but the Honorable Elijah Muhammad
has taught us that "history rewards all research." Let us go to the text book definition
of "venture capital" first. According to http://www.nottingham.ac.uk/business/cmbor/glossary.phtml

"Venture capital: Equity finance in an unquoted, and usually quite young, company to enable
it to start up, expand or restructure its operations entirely. It’s cheaper than bank finance
initially because paying dividends can be deferred; it also provides a strategic partner – but it
implies handing over some control, a share of earnings and decisions over future sales."

Now let’s break this definition down. It talks about this capital being "cheaper…initially"
but results in handing over "some control", "share of earnings" and
"decisions". Now these are the same conditions that Black farmers are trying to get out
from under with the USDA. The USDA loan funds were cheaper than the bank rates initially. However,
USDA officials on the local level began to micro-manage the Black farm borrower out of business,
then sell off the farm to friends and relatives of the USDA loan officer. So why should the farmers
trade off one "massa" for another.

Furthermore, the history of venture capitalism reveals that this was the "brain child"
of a few very rich families who did not have any new ideas to invest in. So they looked around for
creativity and genius, funded those ideas in exchange for an equity position in the new emerging
firm. In other words, they looked for talent, gave them the money in exchange for up to 75%
ownership and control.

The venture capitalists’ goal is to fund new and emerging technologies while they are still too
risky for other sources of finance. Once this new product or service goes big, it then offers stock
on the stock market. The venture capitalists cash in on the initial public offering (IPO) on the
stock exchanges and get "filthier rich". If the venture does not make it, well they just
print some more money, and lend it to the government. These same wealthy families own the Federal
Reserve System that prints the money and finances the US government. These international banking
families pull this same stunt all over the world.

Do you know the "magic" of compound interest? One hundred dollars ($100) loaned out at
6% compounded annually for 100 years, grows to be $35,000 (thirty five thousand dollars). So these
money lenders and moneychangers have amassed so much wealth that they buy ideas, people and
countries.

If we are to build an alternative production, processing and distribution system that gets around
the present system controlled by these same families, we must do it ourselves. The rich only invest
to own, not liberate.

Please support the Three Year Economic Savings Program and BFAA so that we can continue to
develop such a system for Black farmers and our "city cousins", so that we might "Eat
to Live".