Obama Administration 'Leveraging USDA's Lending Programs for Beginning Farmers and Ranchers'
(CNSNews.com) - The U.S. Agriculture Department plans to expand American farmers' access to credit through a new microloan program that offers lower interest rates than credit cards and personal loans.
Among other improvements, USDA said it is "adding flexibility to some of the (loan) eligibility requirements and reducing the application requirements."
USDA farm loans can be used to purchase land, livestock, equipment, feed, seed, and supplies, or to construct buildings or make farm improvements.
"Over the past three years, we have expanded farm and operating loans to Americans from all backgrounds to help raise a new crop of producers across the country," said Agriculture Secretary Tom Vilsack. "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.
"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.
Under the microloan proposal, producers may apply for loans of less than $35,000 using simplified procedures. The program will cut the required paperwork in half and simplify and speed up the process to obtain a loan, USDA said.
Over the past 3 years, USDA says it has provided 103,000 loans to family farmers totaling $14.6 billion, and under Vilsack's leadership, the department is expanding the availability of farm credit, focusing on beginning farmers and ranchers, as well as "socially disadvantaged" producers:
The USDA notes that more than 40 percent of USDA's farm loans now go to beginning farmers. And USDA has increased lending to socially-disadvantaged producers by nearly 50 percent since 2008.
The increase in farm and operating loans has helped improve farmer and rancher productivity, launched new start-up operations, and ensured opportunities in agriculture for many more Americans, USDA said in a news release.
"With expanded access to credit, USDA is helping a new generation of farmers sustain and build upon what is now the most productive period in history for American agriculture."
The Agriculture Departemnt is now seeking public comment on its new microloan program.