USDA Offers New Loans for Small Farms

By George Ford, Reporter

The leaves of corn stalks turn upward to collect more water when it comes, on a farm west of Center Point, Iowa, on Tuesday, July 11, 2012. Much of the midwest is in a moderate to severe drought. (Nikole Hanna/The Gazette-KCRG)

Tools

By Max Walker

CEDAR RAPIDS, Iowa -

The U.S. Department of Agriculture on Tuesday announced details of a new microloan program that will provide financing up to $35,000 for small farmers, veterans and disadvantaged producers.

Agriculture Secretary Tom Vilsack said the microloan program is aimed at supporting the progress of producers through their start-up years by providing needed resources and helping to increase equity so farmers may eventually graduate to commercial credit and expand their operations.

The new program also will have a less burdensome, more simplified application process than what is required for traditional farm loans.

"I have met several small and beginning farmers, returning veterans and disadvantaged producers interested in careers in farming who too often must rely on credit cards or personal loans with high interest rates to finance their start-up operations," Vilsack said.

The microloans will be administered through the USDA's Farm Service Agency Operating Loan Program. In assessing its programs, FSA evaluated the needs of smaller farm operations and any unintended barriers to obtaining financing.

For producers who want to grow niche crops to sell directly to ethnic markets and farmers markets, the microloan program offers a path to obtain financing. For past FSA Rural Youth Loan recipients, the microloan program will provide a bridge to successfully transition to larger-scale operations.

Producers can apply for a maximum of $35,000 to pay for initial start-up expenses such as hoop houses to extend the growing season, essential tools, irrigation, delivery vehicles, and annual expenses such as seed, fertilizer, utilities, land rents, marketing, and distribution expenses. As their financing needs increase, applicants can apply for an operating loan up to the maximum amount of $300,000 or obtain financing from a commercial lender under FSA's Guaranteed Loan Program.

USDA has increased the number of loans to beginning farmers and ranchers from 11,000 loans in 2008 to 15,000 loans in 2011. More than 40 percent of the agency's farm loans now go to beginning farmers.

The USDA has increased its lending to socially-disadvantaged producers by nearly 50 percent since 2008.

Conversation Guidelines

Be Kind

Don't use abusive, offensive, threatening, racist, vulgar or sexually-oriented language.
Don't attack someone personally. Keep it civil and be responsible.

Share Knowledge

Be truthful. Share what you know and what you are passionate about.
What more do you want to learn? Keep it simple.

Stay focused

Promote lively and healthy debate. Stay on topic. Ask questions and give feedback on the story's topic.

Report Trouble

Help us maintain a quality comment section by reporting comments that are offensive. If you see a comment that is offensive, or you feel violates our guidelines, simply click on the "x" to the far right of the comment to report it.


read the full guidelines here »

Commenting will be disabled on stories dealing with the following subject matter: Crime, sexual abuse, property fires, automobile accidents, Amber Alerts, Operation Quickfinds and suicides.

facebook twitter rss mobile google plus
email alerts you tube hooplanow pinterest instagram

What's On KCRG