State, federal programs provide financial help for struggling farmers
Buckeye Farm News
“In today’s current climate, it is becoming increasingly difficult for Ohio’s farmers to sustain their business because of the rising costs associated with fuel, feed, seed and fertilizer,” said Ohio Treasurer Kevin Boyce.
He said the Ohio Treasury’s Agricultural Linked Deposit program provides reduced rate loans to farmers to help offset operating costs associated with feed, seed, fertilizer and fuel. So far this year, the program has allocated more than $123 million to 1,561 Ohio farmers in 82 counties.
Interested farmers need to submit their application to their lender by mid-March. The paperwork is sent to the state treasurer for final approval by mid-April. If accepted, the treasurer purchases a certificate of deposit at a reduced rate from the lender for one year who in turn lowers the rate being given to the farmer.
The Farm Service Agency in Ohio (FSA) also has programs to help Ohio farmers purchase farmland and finance their operations. FSA makes two types of loans: direct and guaranteed. Direct loans are for farmers who are unable to get credit because they are just starting out or have suffered a financial setback, said David Drake, farm loan chief for Ohio FSA.
“These are usually longer loans and lower rates than you can get through the private sector,” Drake said, noting that the maximum loan amount is $300,000.
Guaranteed loans are made by the commercial lender with the FSA acting as the guarantor. The maximum loan amount is just over $1.2 million. Drake said his office allocated $179 million in loans in fiscal year 2008, which ended Sept. 30. The previous year $148 million was issued.
Ohio FSA also has a nine month commodity loan in which farmers store their harvested grain as collateral for the loan. There is no loan limit and March 31 is the deadline for wheat and other small grains and May 31 for corn and beans, said Carletha Fasching, chief price support specialist for Ohio FSA.
She said changes were made this year to the Farm Storage Facility Loan program in accordance with the 2008 Farm Bill. FSA administers the program on behalf of the USDA Commodity Credit Corporation; it is for low-interest financing to build or upgrade farm storage and handling facilities. The maximum loan has been raised from $100,000 to $500,000, and loan terms of seven, 10 and 12 years are available. Previously only seven-year loans were offered. Now hay, fruit and vegetable storage is also allowed. Inthe past, eligible crops were corn, grain sorghum, soybeans, oats, wheat, barley or minor oilseeds harvested as whole grain and pulse crops such as lentils, small chickpeas and dry peas.
The Milk Income Loss Contract program makes direct monthly payments to dairy operators when the national price of milk falls below the Boston Federal Milk Marketing Order Class 1 price for fluid milk. Last month President Barack Obama signed legislation that will provide $350 million in emergency assistance for struggling dairy farmers.
“The MILC payments lately have been bigger because the dairy market has gone to zilch over the last couple of years,” Fasching said.
Jeff Mitchell, conservation programs chief for Ohio FSA, said his office has been emphasizing that farmers need to look at participating in the Conservation Reserve Program not only for conservation but financial reasons. Under CRP, farmers set aside environmentally sensitive farmland for 10 to 15 years and in return receive annual rental payments and cost-share assistance to establish permanent vegetative cover and receive technical assistance.
“We’ve been getting the word out more about the economic benefits, and farmers are rethinking it more now,” Mitchell said. “Farmers need to come into our office and talk about what may fit into the program. If you’ve got an area where the corn never seems to grow or is always wet, maybe it would be better to give up and put in a wetland instead of trying to continue farming it.”
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Fruitful Finances For Farmers
A free financial education conference will be held Friday, Nov. 20 from 8:00 a.m. to 4:00 p.m. at Jame S. Dicke Hall at the Wright State University Lake Campus in Celina. The conference will focus on the unique needs of Ohio’s farmers. For more information call 800-228-1102.