USDA Expands Credit Available to Farms
Agency expands credit available to farmers and ranchers. And a new microloan program targets small farmers to help them avoid high-interest debt.
Published: May 24, 2012
This week, USDA had announced a substantial expansion in available credit to farmers and ranchers. The money, which helps farmers and ranchers boost productivity, launch new start-up operations and ensure new opportunities, is aimed at helping a range of producers. An important area is a new generation of farmers who can help build upon a productive period in history. To that end, Secretary of Agriculture Tom Vilsack announced the Department is seeking comments on a new microloan program to help small and family operations progress through their start-up years with needed resources, while building capacity, increasing equity and eventually graduating to commercial credit.
Agency expands credit available to farmers and ranchers. And a new microloan program targets small farmers to help them avoid high-interest debt.In the past three years, USDA has proved 103,000 loans to family farmers totaling $14.6 million. Under Secretary Vilsack's leadership, the department is expanding the availability of farm credit with a special focus on beginning farmers and ranchers, as well as disadvantaged producers:
- Since 2008, the number of loans to beginning farmers and ranchers has climbed from 11,000 to 15,000. More than 40 percent of USDA's farm loans now go to beginning farmers;
- Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers. USDA has increased lending to socially-disadvantaged producers by nearly 50 percent since 2008.
- The total value of loans in persistent-poverty counties is 60 percent higher today than in 2010.
USDA farm loans can be used to buy land, livestock, equipment, feed, seed and supplies. The money can also be used to construct buildings or make farm improvements. For beginning farmers and ranchers, USDA provides affordable credit, including loans under the Beginning Farmer and Rancher Program and Youth Loans.
Microloan program idea
Vilsack, as part of an ongoing effort to streamline and modernize its service, announced today that USDA is also seeking comments on a proposal to improve its Operating Loans Program to better meet the needs of small farmers with a new microloan program.
Under the microloan proposal, producers who need a loan for less than $35,000 may apply using simplified and streamlined procedures. The program will cut the required paperwork in half and simplify the process to obtain a loan. The goal of the microloan program is to better meet the credit needs of small farm operations while making more effective use of FSA resources.
Juli Obudzinski, policy associate with the National Sustainable Agriculture Coalition, says the group applauds USDA for being responsive to the needs of small and beginning farmers who have faced significant hurdles in obtaining loans through federal credit programs. "This new program is a step in the right direction for the next generation of farmers who often are looking for small loans when they're first getting started in agriculture."
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Tagged: usda, livestock, FSA, sustainable agriculture