USDA establishes microloan program
January 15, 2013 | 09:26 PM
The Agriculture Department has established a new program designed to help small and family operations and beginning and socially disadvantaged farmers secure loans under $35,000, Agriculture Secretary Tom Vilsack announced today in Memphis.
"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,” said Vilsack.
“By further expanding access to credit to those just starting to put down roots in farming, USDA continues to help grow a new generation of farmers, while ensuring the strength of an American agriculture sector that drives our economy, creates jobs, and provides the most secure and affordable food supply in the world.”
The final rule establishing the microloan program will be published in the January 17 issue of the Federal Register. It will be administered by the Farm Service Agency, which already administers the agency’s operating loan program.
The Obama administration decided to set up the new program with a simplified loan application process after concluding that help was needed for beginning farmers and ranchers and growers of niche crops to sell directly to ethnic and famers’ markets, the agency said in a news release. For past FSA Rural Youth Loan recipients, the microloan program provides a bridge to successfully transition to larger-scale operations, the agency said.
Producers can apply for a maximum of $35,000 to pay for start-up expenses such as hoop houses to extend the growing season, essential tools, irrigation and delivery vehicles, and annual expenses such as seed, fertilizer, utilities, land rents, marketing, and distribution expenses.
As the need for financing increases, these farmers 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.
"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,” said Vilsack.
“By further expanding access to credit to those just starting to put down roots in farming, USDA continues to help grow a new generation of farmers, while ensuring the strength of an American agriculture sector that drives our economy, creates jobs, and provides the most secure and affordable food supply in the world.”
The final rule establishing the microloan program will be published in the January 17 issue of the Federal Register. It will be administered by the Farm Service Agency, which already administers the agency’s operating loan program.
The Obama administration decided to set up the new program with a simplified loan application process after concluding that help was needed for beginning farmers and ranchers and growers of niche crops to sell directly to ethnic and famers’ markets, the agency said in a news release. For past FSA Rural Youth Loan recipients, the microloan program provides a bridge to successfully transition to larger-scale operations, the agency said.
Producers can apply for a maximum of $35,000 to pay for start-up expenses such as hoop houses to extend the growing season, essential tools, irrigation and delivery vehicles, and annual expenses such as seed, fertilizer, utilities, land rents, marketing, and distribution expenses.
As the need for financing increases, these farmers 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.
