Adrian Sainz
Associated Press

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January 15, 2013
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USDA to offer small loans to farmers who grow for locals


MEMPHIS, Tenn. — With interest in locally grown food soaring, the federal government said Tuesday it has created a small loan program to help community farmers who might not be able to borrow money from banks.

Call it seed money.

The low-interest “microloans” of up to $35,000 are designed to aid startup costs, bolster existing family-run farms and help minority growers and military veterans who want to farm.

Over the last three years, there has been a 60 percent increase in local growers who sell directly to consumers or farmers markets, Agriculture Department Secretary Tom Vilsack said.

Kay Jensen, an organic farmer who grows broccoli, strawberries and tomatoes in Sun Prairie, Wis., saw two immediate benefits from the program — paperwork would go from about 30 pages to seven, and it would be easier to borrow a manageable sum.

She said she might consider a loan for $3,000 to $10,000 to expand her irrigation systems.

“A lot times what we need is just small amounts of money, but a lot of times the only funding available is large amounts of money,” she said.

“This whole concept of a microloan, where you’re looking at smaller, reasonable amounts of money, this really fits an incredible niche.”

The loan can cover the costs of renting land, buying seed and equipment, and other expenses. One goal is to create more opportunities for entrepreneurship and employment in the farming industry, Vilsack said.

Another goal is to provide beginners a chance to build credit, so that they can eventually qualify for higher-value loans and expand.

“It’s about making sure that we have diversity within agriculture, that we have a good blend of large production facilities, medium-sized operations and smaller operations,” Vilsack said.

“It will help bolster the local and regional food system movement that is taking place.”

Vilsack announced the program a day after speaking at the American Farm Bureau Federation’s annual meeting in Nashville.

Since 2009, the federal government has increased the number of loans to beginning farmers and ranchers from 11,000 loans in 2008 to 15,000 loans in 2011.

The interest rate for the new loan program changes monthly, and is currently 1.25 percent, according to the USDA, and the loan does not have to be repaid for seven years.

Karen Archipley of Archi’s Acres in San Diego said she and her husband, Colin, an Iraq vet and former Marine Corps sergeant, run a program on their three-acre organic, hydroponic farm that teaches returning veterans how to be farmers and marketers of their own produce.

“I’m so excited to hear about this because it impacts us directly,” Karen Archipley said.


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The Union Updated Jan 16, 2013 01:31AM Published Jan 16, 2013 09:34AM Copyright 2013 The Union. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.