Without question, there are a myriad of farm and ranch programs available to today’s producer.
One key objective is to identify which programs (if any) are beneficial to your operation.
The CARES Act makes available various incentive-based offerings for the eligible producer. I want to offer some general information pertinent to some of the more common, locally-available programs.
Spending some time perusing the internet will be beneficial as it relates to farm-based programs. I’m including some website addresses as applicable. I note this article barely touches the surface on what’s available to our agricultural producers. I hope this generates more interest.
The USDA locator link (https://go.ozarksfn.com/vky) will get you a quick link to your closest USDA office.
FSA, the Farm Service Agency, is a nationwide service provider operating under the USDA, the United States Department of Agriculture. FSA is divided into two groups, offering loan and program benefits to eligible farmers.
There are local offices in your area that provide guidance and program specifics. Under our current Covid-19 environment, most offices are operating via telephone and electronic means.
FSA’s Farmer Loan Program offers various loan programs for farmers. The two most prevalent are OL (Operating Loans) and FO (Farm Ownership (real estate-based loans)). An OL loan can be made up to their maximum amount of $400,000. Both OL and FO loans can be either direct, participating or guaranteed products.
FSA Direct Loans are just that, loans made directly from the agency with funds appropriated by Congress. They are attractive because the government will offer these under very favorable rates and terms. Direct FO loans can be extended up to $600,000. Loans for $300,150 are available for down payment loans to beginning farmers.
The Participation Loan Program provides for a private lender or commercial bank to join in offering money to complete an eligible loan purpose. These can be under a 50/50 scenario whereby both FSA and the outside lender combine resources to meet the borrower’s need.
FSA’s Loan Guarantee Program offers the private lender a loan guarantee for up to 90 percent of the request (95% to a beginning farmer). This program is desirable for all parties. The banks and lenders like it for the assurance of ultimate repayment. Borrowers benefit from this program as it often allows them to attain a loan that otherwise might not be available.
FSA’s Farmer Programs provide a wide variety of services and offerings as well. Commodity, Conservation, Disaster and Energy assistance are a sample of available programs to help farmers.
For more information about the USDA/FSA, go to https://go.ozarksfn.com/5i2
The Natural Resource and Conservation Service exist to enhance conservation practices and much more. NRCS provides valuable farm services that compliment your operation through Farm Plans, Nutrient Management Programs as well as other financial and technical assistance. Go to https://go.ozarksfn.com/asv for more information.
The Small Business Administration (SBA) is another federal agency designed to financially assist small businesses (which can include agricultural producers) through loan guarantees and other programs.
Admittedly, the number and magnitude of programs, services and offerings can be overwhelming. The key is to isolate the agency or provider that best meets your current needs and drill down into their website. Find a local representative and explore what may be available to you.
I recognize that some farmers and ranchers may disagree with the need for these services. However, many of these are services and programs are funded through your tax dollars. Therefore, you can feel good about using what’s available.
I’ve had the opportunity to see many of these services helping others over time. If used appropriately, the programs and incentives available to you can be an important enhancement to your farming operation.
Happy exploring, enjoy the journey and Merry Christmas!
Ken W. Knies is an agricultural and rural consultant. He holds a bachelor’s of science and arts from the University of Arkansas and a master’s of business administration from Webster University in St. Louis, Mo. He formed Ag Strategies, LLC as a business unit focused on quality borrowers and lenders.
