Agriculture Secretary Tom Vilsack announced the new microloan program today, stating that it will provide loans for under $35,000 to help launch start-ups and provide needed resources and increased equity so farmers can graduate to commercial credit and expand their operations.
“I have met several small and beginning farmers, returning veterans and disadvantaged producers interested in careers in farming who too often must rely on credit cards or personal loans with high interest rates to finance their start-up operations,” said Vilsack. “By further expanding access to credit to those just starting to put down roots in farming, USDA continues to help grow a new generation of farmers, while ensuring the strength of an American agriculture sector that drives our economy, creates jobs, and provides the most secure and affordable food supply in the world.”
The less burdensome and more simplified loan process will allow producers to apply for a maximum of $35,000 to pay for initial start-up expenses such as hoop houses to extend the growing season, essential tools, irrigation, delivery vehicles and annual expenses such as seed, fertilizer, utilities, land rents, marketing and distribution expenses.
Since 2009, USDA has made more than 128,000 loans totaling nearly $18 billion. The number of loans to beginning farmers and ranchers increased from 11,000 in 2008 to 15,000 in 2011. More than 40 percent of USDA’s farm loans now go to beginning farmers, while lending to socially-disadvantaged producers increased by nearly 50 percent since 2008.