January 15, 2013, Secretary Vilsack announced a new microloan program designed to provide start-up costs associated with farming. Those who qualify could potentially use this capital to grow fruits and vegetables for local markets.
Dr.Kurt Guidry with the LSU AgCenter shares his thoughts about this new loan program:
The new microloan program is designed to help small and family operations, beginning and socially disadvantaged farmers secure loans under $35,000. This new program is aimed at bolstering the progress of producers through their start-up years by providing needed resources and helping to increase equity so that farmers may eventually graduate to commercial credit and expand their operations. The microloan program will also provide a less burdensome, more simplified application process in comparison to traditional farm loans.
For beginning farmers and ranchers, for instance, the new microloan program offers a simplified loan application process. In addition, for those who want to grow niche crops to sell directly to ethnic markets and farmers markets, the microloan program offers a path to obtain financing. For past FSA Rural Youth Loan recipients, the microloan program provides a bridge to successfully transition to larger-scale operations. Producers can apply for a maximum of $35,000 to pay for initial start-up expenses, essential tools, irrigation, delivery vehicles, and annual expenses such as seed, fertilizer, utilities, land rents, marketing, and distribution expenses.
The final rule establishing the microloan program is expected to be published in the Jan. 17 issue of the Federal Register. Once that final rule is released, we will have a clearer picture as to the details of how the program will be implemented.
Contact your FSA office for more details.