USDA Creates New Microloan Program For Small Farms

Recently, Agriculture Secretary Tom Vilsack announced a proposed rule for a new microloan program that would be part of the suite of credit options available to farmers through the Farm Service Agency (FSA).

The new program would allow FSA to make smaller loans, with a principal balance of up to $35,000, and would streamline the application process to require less paperwork for farmers.

"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," said Juli Obudzinski, National Sustainable Agriculture Coalition (NSAC) Policy Associate.

The goal of the microloan program is to better meet the credit needs of small farm operations while making more effective use of FSA resources, according to the USDA.

"As we expand options in agriculture, we're seeing a new vibrancy across the countryside as younger people-many of whom are now involved in local and regional production-pursue livelihoods in farming, raising food for local consumption," Vilsack said.

Although the microloan program is not exclusively targeted at young or beginning farmers, the program will be incredibly helpful in allowing these groups to access federal credit and obtain loans to help them start their farming operations, stated the NSAC.

"Capital is the number one need of young and beginning farmers in the United States," said Lindsey Lusher Shute of the National Young Farmers' Coalition. "USDA microloans will fuel new farm businesses and a new generation of family farmers."

According to Vilsack, the Department is seeking public comments on the program. Comments should be submitted no later than July 23, 2012. To leave a comment online, visit the Federal eRulemaking Portal or submit your comment by mail to the Director of the Loan Making Division (LMD), FSA, USDA, 1400 Independence Avenue, SW, Stop 0522, Washington, DC 20250-0522.

For more information on the microloan program, click here.

May 29, 2012

Source: USDA