Business : FSA Proposes New Microloan for Small Farms

John R. Whitaker, State Executive Director for USDA’s Iowa Farm Service Agency announced that USDA is seeking comments on proposed modifications to its Operating Loans (OL) application, eligibility, and security requirements for new a Microloan (ML) program. These loans will better serve the unique operating needs of small family farm operations.

“This new proposed loan program has potential for helping a new generation of farmers by expanding access to credit,” said Whitaker. “These loans are intended to make our OL program more widely available and attractive to smaller operators by streamlining the process and adding flexibility in meeting farm experience requirements.”

Under the ML proposal, producers who need a loan for less than $35,000 may apply using simplified and streamlined procedures. The program will reduce paperwork and simplify the process to obtain a loan. The goal of the ML program is to better meet the credit needs of small farm operations while making more effective use of FSA resources. Small farmers often rely on credit cards or personal loans, which carry high interest rates and have less flexible payment schedules, to finance their operations. The improvements aim to offer a more efficient processing time for smaller loans, adding flexibility to some of the eligibility requirements and reducing the application requirements.

“I would encourage potential customers of this program to review the proposed rule and make comments”, added Whitaker. “With your input, this program can better meet your needs.”

The proposed rule may be viewed at http://www.fsa.usda.gov/FSA/federalNotices?area=home&subject=lare&topic=frd-pi or through the FSA home page at http://www.fsa.usda.gov.

Comments should be submitted no later than July 23, 2012 by either of the following methods:

· Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments.

· Mail: Director, Loan Making Division (LMD), FSA, USDA, 1400 Independence Avenue, SW, Stop 0522, Washington, DC 20250-0522.

Since 2007, the number of loans to beginning farmers and ranchers in Iowa has grown by 152%. More than 70 percent of FSA’s farm loans went to beginning farmers in 2011.

USDA farm loans can be used to purchase land, livestock, equipment, feed, seed, and supplies, or 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.

For information on this and other programs administered by FSA, contact your local office or visit www.fsa.usda.gov