4-H program helps young people learn
Tyler Davis shows a pig he raised for the California Mid-Winter Fair & Fiesta. (PHOTO COURTESY TYLER DAVIS / September 29, 2012)
“I’ve never lost money. I’ve done quite well,” he said.
Davis raises farm animals to sell at the California Mid-Winter Fair & Fiesta in Imperial. This is his fourth year raising pigs. He said he typically divides $1,000 among buying the animal, feed and supplies for it, and the entry fee at the fair, and more or less doubles his money when he sells the animal.
“I’ve sold the animals right around $2,000,” he said.
Trading in livestock is not an unusual activity in the Imperial Valley. What is unusual about Davis is that he’s only 16 years old, and his business in buying, raising and selling pigs is part of a program in 4-H designed to teach young people money-management skills and promote self-confidence, among other things. And, they’re not using play money or simulations. This is a hands-on project that poses the same challenges that a business person deals with. They do research, choose their business, line up financing and, if they expect to be successful, they jump in with both feet.
Participants start by deciding on an animal to raise. They have options. Some choose sheep, some choose beef or swine and some choose rabbits. They then need to figure out how much money it will take to buy the animal, the feed and supplies needed to raise it, and entry into the California Mid-Winter Fair & Fiesta. They then apply for a loan.
The typical loan for an animal and feed is about $600, said Linda Hamby, a high school teacher and 4-H volunteer.
“They have to get a loan, budget their money … manage their feed,” she said. “Mama won’t feed the lamb because they don’t want to get up.”
The program promotes responsibility.
“This animal costs money,” Hamby said. “They have to go back to the bank and pay it back.”
Karen Ayala, a loan officer at Community Valley Bank, also emphasized that this program is not a game.
“It’s real money,” she said. “They sign loan documents and are required to have insurance on their project.”
Like any other business, events may conspire against the business owner and wipe him out. And, like with any other loan, there is the risk it will not be paid back.
“We have had issues where loans have not been repaid. We handle them on a case-by-case basis,” Ayala said. “Most kids make every effort to repay loans.”
Ayala said some children’s animals have become sick or have died, wiping out any chance for them to recoup their investment.
Participants need not worry about damage to their credit rating if they find themselves unable to repay their loans because they are not technically on the hook for the loan.
“Because they are underage you cannot set up a valid contract with the child,” Ayala said. “The loan is set up in conjunction with a parent or guardian.”
Ayala said there is potential for damage to the signer’s credit if the loan is not repaid, but stressed that the program exists to help children learn valuable skills.
“People who do these projects learn responsibility,” she said. And, like any lender that likes to reduce its risk, Community Valley Bank asks to see a business plan before a loan is approved.