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.
“NSAC applauds the Department of Agriculture for being responsive to the needs of small and beginning farmers who have faced significant hurdles in obtaining loans through federal credit programs,” said Juli Obudzinski, Policy Associate with the National Sustainable Agriculture Coalition. “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.”
A modified version of this microloan program that includes a specific priority on beginning farmers is included in the Beginning Farmer and Rancher Opportunity Act (H.R.3236, S.1850), which NSAC and partners such as the National Young Farmers’ Coalition have been gathering support for across the country. Although the microloan program announced today 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.
"Capital is the No. 1 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."
In addition to credit needs, there are several other incredibly important issues for beginning farmers that are currently on the table as the Senate and House take up the 2012 Farm Bill, many of which are included in the Beginning Farmer and Rancher Opportunity Act. NSAC will monitore the new microloan program throughout the rulemaking process to ensure it meets the needs of beginning farmers and will continue to advocate for programs that serve the next generation of farmers and ranchers as the farm bill process moves forward.