RICHMOND—Secretary of Agriculture Tom Vilsack announced May 23 that the U.S. Department of Agriculture is seeking comments on a new microloan program to help small and family farm operations progress through their start-up years.
“By leveraging USDA's lending programs for beginning farmers and ranchers and smaller producers, we're helping to rebuild and revitalize our rural communities,” Vilsack said after a meeting with producers at Virginia Farm Bureau’s headquarters in Goochland County.
Under the microloan proposal, producers who need a loan for less than $35,000 can apply using simplified and streamlined procedures. The program will cut the current required paperwork in half, and its goal is to better meet the credit needs of small farm operations. Smaller-scale farmers often rely on credit cards or personal loans to finance their operations.
“We obviously as a country have gone through a difficult time,” economically, Vilsack said. As Americans look to rebuild the economy, “the key to that and the key to recovery is agricultural production. … Central to all of this is people being in the farming business, and that involves credit.”
USDA farm loans can be used to purchase land, livestock, equipment, feed, seed and supplies, or to construct buildings or make farm improvements. In the past three years, USDA has provided 103,000 loans totaling $14.6 billion to family farms. Vilsack said the microloan program stands to benefit new and socially disadvantaged farmers and veterans in particular.
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, and more than
50 percent to beginning and socially disadvantaged producers. USDA has increased lending to socially disadvantaged producers by nearly 50 percent since 2008; the total value of loans in what it identifies as “persistent-poverty counties” is 60 percent higher today than in 2010.
Vilsack said the microloans will be funded from USDA’s existing pool for direct producer loans, and he estimated the agency will be able to offer “roughly 5,000 loans” under the microloan program.
The proposed rule can be viewed on the FSA website at fsa.usda.gov. Comments should be submitted no later than July 23 through the Federal eRulemaking Portal at regulations.gov or by mail to Director, Loan Making Division (LMD), FSA, USDA, 1400 Independence Ave. SW, Stop 0522, Washington, DC 20250-0522.
Contact USDA Office of Communications at 202-720-4623.