Farm Service Agency Proposes Microloans for Small Farmers
Saturday, June 02, 2012
The Obama administration has proposed making it easier to provide federal agricultural loans to young farmers in need of financing.
New rules proposed by the U.S. Department of Agriculture (USDA), aimed at the 70% of American farms that gross less than $25,000 a year, would allow the Farm Service Agency (FSA) to make microloans of up to $35,000. The regulations also would streamline the application process to require less paperwork for farmers.
FSA’s OL (Operating Loan) program offers loans up to $300,000. However, applicants must have a 4-year college degree in agriculture or proof of on-farm training or experience. Microloan applicants will only have to demonstrate past membership in an agriculture-related organization, such as 4-H Club or Future Farmers of America.
“This new program is a step in the right direction for the next generation of farmers who often are looking for smaller loans when they’re first getting started in agriculture,” Juli Obudzinski, a National Sustainable Agriculture Coalition policy associate, said in a press release.
The farm-oriented American Agriculturalist noted: “Not all public comments, thus far, have been positive though. Several criticized USDA for wanting to open the gate wider to more bad loans that, in the past, have become taxpayer burdens.”
-Noel Brinkerhoff, David Wallechinsky
To Learn More:
USDA Proposes Streamlined Microloans For Small-scale Farmers (American Agriculturist)
Background (Federal Register)
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