Microloans

What Federal Programs Are Available?

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We are frequently asked what federal programs are available for farmers and ranchers.  Now, with the updated publication Building Sustainable Farms, Ranches and Communities: A Guide to Federal Programs for Sustainable Agriculture, Forestry, Entrepreneurship, Conservation, Food Systems, and Community Development a resource exists that lists available programs, eligibility requirements, funding parameters, contact information, and when applicable, project examples.

The guide lists the approximately 70 programs available, from grants, loans, to technical assistance and information and educational resources.

While the guide lists the programs in alphabetical order, the programs are also listed by category.  Categories include:

  • Economic Development for Farms, Small Businesses and Communities
  • Farm Loans
  • Insurance and Risk Management
  • Natural Resources Conservation and Management
  • Nutrition and Consumer Food Access
  • Renewable Energy and Energy Conservation
  • Research and Outreach
  • Value Added and Marketing Innovations

The guide is available for free online or a paper copy is available for a $3 handling fee.

The guide is funded by the U.S. Department of Agriculture and was produced in cooperation with the National Center for Appropriate Technology (NCAT), Michael Fields Agricultural Institute, and the National Sustainable Agriculture Coalition (NSAC). USDA agencies and programs that provided major support for the publication include Sustainable Agriculture Research and Education Program (SARE), U.S. Forest Service; and National Institute of Food and Agriculture (NIFA).

Updates to FSA Microloan Program

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The microloan program, operated by the Farm Service Agency, has recent changes that many farmers will likely appreciate.

First, the loan limit is raised from $35,000 to $50,000.  This means that farmers or ranchers applying for a microloan can now access up to $50,000 for expenses such as:

  • Start-up costs;
  • Input costs (e.g. seed, fertilizer, chemicals, utilities);
  • Marketing and distribution costs;
  • Family living expenses;
  • Purchase of livestock, equipment, machinery or the like essential to the operation;
  • Minor improvements such as wells;
  • Tools;
  • Delivery vehicles; and
  • Irrigation

The above is a small sampling of possibilities to use with microloan funding.

Also of note, microloan funding to beginning and military veteran farmers does not count towards the total number of years a farmer can receive assistance through FSA’s direct loan program.  If you are not a beginning or military veteran farmer, the microloan counts towards the seven year limit in which a farmer can receive FSA direct loan assistance.

If you have any questions about microloans, please feel free to contact us.  We’re always happy to answer your questions!

What’s in the Farm Bill for Beginning Farmers?

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This post does not promise to be a comprehensive review of all the new programs and funding in the new Farm Bill.  Rather, it is a short review for you to begin to think about ways in which you can potentially use some new programs or additional funding in the Farm Bill for your own operation.  (For a thorough review of the beginning farmer initiatives, click here.)

So what’s in there?

  • Additional funding for beginning farmer and rancher training and outreach programs.  This website and program is funded via the Beginning Farmer and Rancher Development Program.  That program has received additional funding with a new emphasis on military veteran farmers.
  • Enhanced premium subsidies for crop insurance.  The enhanced subsidy of 10 percent points is only for a beginning farmer in the first five years of his/her farming career.
  • The Farm Service Agency’s microloan program becomes permanent.  For beginning and military veteran farmers, microloans will no longer have a term limit.
  • Additionally, the FSA will continue to prioritize beginning farmers in its direct and guaranteed farm ownership and operating loan programs.
  • NRCS’ EQIP program will continue to cost-share with beginning, limited resource, and socially disadvantaged farmers.  Additionally, while a farmer can current receive up to 30% of a project’s cost in advance, the new farm bill increases the possible cost-share to 50%.
  • Land access is obviously an important topic and there are some new initiatives for beginning farmers.  The FSA Down Payment Loan Program increases the value of land eligible from $500,000 to $667,000. A new Agricultural Conservation Easement Program, per the Land Trust Alliance:

The Agricultural Lands Easement program (ALE) combines the Farm and Ranch Lands Protection Program (FRPP) and Grassland Reserve Program (GRP). ALE is part of the larger Agricultural Conservation Easement Program (ACEP), which also contains the former Wetlands Reserve Program (WRP).

  • There are some additional provisions, such as conservation funding and a return of the Transition Incentive Program (with an increase in funding) administered by the FSA.  There are also some clarifications within the Value Added Producer program defining beginning farmer status in multi-applicant applications.

Overall, there are some interesting opportunities for beginning farmers and ranchers in the new Farm Bill.  As the new programs, additional funding, and more details become available, we’ll know more about how to maximize use of the programs for specific types of operations.  But as of now, there appears to be a significant amount of promise in the new Farm Bill for beginning farmers and ranchers, socially disadvantaged farmers, and veteran farmers.

 

Checking in on the FSA’s microloan program

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We’ve previously discussed the FSA’s microloan program, with its possibilities for beginning farmers.   With the end of the year approaching, there is now data concerning how many loans have been made, along with information on how many of the loans went to beginning farmers, veterans, or socially disadvantaged producers.

The National Sustainable Agriculture Coalition has an interesting article that delved into the microloan statistics.  Most pertinent for Nebraska and South Dakota producers is that both states have made microloans, just not to the extent of other states.  NSAC suggests multiple reasons: total number of producers, acreage size of operations, type of operations, FSA outreach and training on microloans, and other factors.

But what I find most interesting about the article is that promise that microloans hold for beginning farmers.  Of all microloans issued, 68% went to beginning farmers.  These microloans can (and did) cover many different operations, production methods, and producer needs.  Of particular import, the microloans covered these expenses without need to resort to higher-interest options such as credit cards, lines of credit, or high interest loans.  Less money paid in interest means more money for the operation and/or living expenses for the beginning farmer.

Ultimately, it is for the beginning farmer to determine whether microloans are a good fit for the operation and farming plans.  If you want someone to discuss your operation with and whether microloans are a good fit, you are welcome to contact us.  We’re happy to help!

Beginning Farmers and Veterans

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Because yesterday was Memorial Day, it is appropriate to discuss unique programs for veterans who are also beginning farmers.  If you are interested in the types of programs starting across the country, the National Young Farmers’ Coalition has a good overview.

In Nebraska, The Center for Rural Affairs spearheads the Veteran Farmers Project.  The Veteran Farmers Project provides training on farming topics and financing, individual consultants, and a HelpLine.

There is also the Farmer Veteran Coalition which lists various veteran farms and employment opportunities.  It also has an equipment donation program for farmers in Iowa.

And remember our conversation about the Farm Service Agency’s new microloans?  Microloans are also available to veterans.  Keep in mind that the Small Business Association also provides microloans up to $50,000 through non-profit intermediaries.  The SBA loans are similar to the FSA loans — you may purchase equipment or machinery, provide working capital, purchase inventory or supplies, and/or furniture and fixtures.  Of note, the microloan from the SBA cannot be used to purchase real estate. A listing of participating intermediaries by state is here.

Don’t forget, in Nebraska and South Dakota, Legal Aid of Nebraska can provide assistance to veterans who are also beginning farmers.  We’re happy to help so feel free to contact us at any time!

Friday Facts, Fun and Food

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Looks like the weather cooperated for farmers this week.  As I drove across the state, it was great to see fields planted (or in the process thereof!).

CRP sign-up begins May 20 through June 14.  Contact your local FSA office for information.

Some changes are afoot with crop insurance for organic producers.

Meet the first approved microloan applicant, age 19.

Beef Tenderloin and Asparagus …. you really can’t go wrong here.