Agriculture Secretary Vilsack Announces New and Expanded Access to Credit for America's Farmers and Ranchers

USDA Office of Communications <usda@xxxxxxxxxxxxxxxxxxxxxx> · Wed, 23 May 2012 10:17:11 -0500

Title: 
    Agriculture Secretary Vilsack Announces New and Expanded Access to Credit for America's Farmers and Ranchers

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Release No. 0163.12

Contact:

USDA Office of Communications (202) 720-4623

Agriculture Secretary Vilsack Announces New and Expanded Access to Credit for America's Farmers and Ranchers

New Microloan Proposal Helps Small Farmers Avoid High-Interest Credit Card and Personal Loans

RICHMOND, Va., May 23, 2012– Agriculture Secretary Tom Vilsack announced today that the U.S. Department of Agriculture has made substantial, year-over-year gains in expanding credit opportunities for farmers and ranchers across the United States. 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. 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. To that end, Vilsack announced the Department is seeking comments on a new microloan program to help small and family operations progress through their start-up years with needed resources, while building capacity, increasing equity, and eventually graduating to commercial credit.
"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 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."
In the past 3 years, USDA has provided 103,000 loans to family farmers totaling $14.6 billion, and under Secretary Vilsack's leadership, the department is expanding the availability of farm credit with a special focus on beginning farmers and ranchers, as well as socially disadvantaged producers:

Since 2008, the number of loans to beginning farmers and ranchers has climbed from 11,000 to 15,000. More than 40 percent of USDA's farm loans now go to beginning farmers;
Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers. USDA has increased lending to socially-disadvantaged producers by nearly 50 percent since 2008. 
The total value of loans in persistent-poverty counties is 60 percent higher today than in 2010. 

USDA farm loans can be used to purchase land, livestock, equipment, feed, seed, and supplies, or to construct buildings or make farm improvements. For beginning farmers and ranchers, USDA provides affordable credit, including loans under the Beginning Farmer and Rancher Program and Youth Loans. In addition, USDA provides grants under the Beginning Farmer and Rancher Development Program. The establishment of a coordinating office for USDA beginning farmer programs has supported education and training for more than 15,000 beginning farmers and ranchers.
As part of ongoing efforts to streamline and modernize its service to American agriculture, Vilsack announced today that USDA is also seeking comments on a proposal to improve its Operating Loan Program to better meet the needs of small farmers with a new microloan program. Under the microloan proposal, producers who need a loan for less than $35,000 may apply using simplified and streamlined procedures. The program will cut the required paperwork in half and simplify the process to obtain a loan. The goal of the microloan program is to better meet the credit needs of small farm operations while making more effective use of FSA resources. Small farmers often rely on credit cards or personal loans, which carry high interest rates and have less flexible payment schedules, to finance their operations. The improvements aim to offer a more efficient processing time for smaller loans, adding flexibility to some of the eligibility requirements and reducing the application requirements.
The proposed rule may be viewed at http://www.fsa.usda.gov/FSA/federalNotices?area=home&subject=lare&topic=frd-pi or through the FSA home page at http://www.fsa.usda.gov. Comments should be submitted no later than July 23, 2012 by either of the following methods:
Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments.
Mail: Director, Loan Making Division (LMD), FSA, USDA, 1400 Independence Avenue, SW, Stop 0522, Washington, DC 20250-0522.
Following is a breakdown of the loans to socially-disadvantaged producers in fiscal years (FY) 1999, 2008 and 2011, respectively:
                          FY99                       FY08                                       FY11                         
                          Direct Loans         Direct Loans                          Direct Loans             
Loans                 4,005                     Loans         4,281                     Loans         5,901       
Volume              $296 million          Volume      $379.4 million       Volume      $565.4 million

Overall Socially Disadvantaged Producer Loan Portfolio*          
Individuals          15,906                    16,910                                     18,114        
Dollars               $1.53 billion            $1.97 billion                              $2.35 billion
(*guaranteed and direct)

Through USDA's Strike Force Initiative, the department is helping to relieve persistent poverty in high poverty counties by accelerating assistance and improving participation in and access to our programs and services. Since Strike Force began, Farm Service Agency (FSA) loans have helped hundreds of minority producers in high-poverty counties in states with large populations of minority farmers and ranchers. Already in 2012, USDA has made 513 direct loans totaling nearly $45 million to producers in Strike Force counties—a 60-percent increase over the same period last year. Of the total, 74 percent of the loans have gone to beginning and socially disadvantaged producers. More information about the loans to Strike Force counties can be found below.
Following is a breakdown of the loans to producers in the Strike Force states in FY 2011 and 2012:

                                                                          FY11                           FY12
Arkansas 
Number of Direct Loans                                 59                               97 
Direct Loan Amount in Dollars                        $4,426,410                $9,113,450 
Number of Guaranteed Loans                         48                              57 
Guaranteed Loan Amount in Dollars               $17,085,250                $22,261,980

Colorado
Number of Direct Loans                                   70                              97
Direct Loan Amount in Dollars                        $5,257,995                 $8,474,330
Number of Guaranteed Loans                          34                              20
Guaranteed Loan Amount in Dollars               $10,507,304                $8,192,600

Georgia
Number of Direct Loans                                   126                            175
Direct Loan Amount in Dollars                        $13,517,331                $18,533,690
Number of Guaranteed Loans                          68                               53
Guaranteed Loan Amount in Dollars               $25,631,623                $19,035,270

Mississippi                                                                                            
Number of Direct Loans                                   68                              97
Direct Loan Amount in Dollars                        $3,330,945                  $6,106,360
Number of Guaranteed Loans                          16                               20
Guaranteed Loan Amount in Dollars               $7,049,638                  $7,125,000

Nevada                                                                                                 
Number of Direct Loans                                   28                              41
Direct Loan Amount in Dollars                        $1,637,300                  $1,874,760
Number of Guaranteed Loans                          7                                 1
Guaranteed Loan Amount in Dollars               $2,869,000                  $80,000

New Mexico                                                                                         
Number of Direct Loans                                   0                                6
Direct Loan Amount in Dollars                        $0                                $755,000
Number of Guaranteed Loans                          0                                 0
Guaranteed Loan Amount in Dollars               $0                                $0
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USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).

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Release No. 0163.12
Contact:
USDA Office of Communications (202) 720-4623

Agriculture Secretary Vilsack Announces New and Expanded Access to Credit for America's Farmers and Ranchers

New Microloan Proposal Helps Small Farmers Avoid High-Interest Credit Card and Personal Loans

RICHMOND, Va., May 23, 2012– Agriculture Secretary Tom Vilsack announced today that the U.S. Department of Agriculture has made substantial, year-over-year gains in expanding credit opportunities for farmers and ranchers across the United States. 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. 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. To that end, Vilsack announced the Department is seeking comments on a new microloan program to help small and family operations progress through their start-up years with needed resources, while building capacity, increasing equity, and eventually graduating to commercial credit. "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 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." In the past 3 years, USDA has provided 103,000 loans to family farmers totaling $14.6 billion, and under Secretary Vilsack's leadership, the department is expanding the availability of farm credit with a special focus on beginning farmers and ranchers, as well as socially disadvantaged producers: Since 2008, the number of loans to beginning farmers and ranchers has climbed from 11,000 to 15,000. More than 40 percent of USDA's farm loans now go to beginning farmers; Over 50 percent of the loans went to beginning and socially disadvantaged farmers and ranchers. USDA has increased lending to socially-disadvantaged producers by nearly 50 percent since 2008. The total value of loans in persistent-poverty counties is 60 percent higher today than in 2010. USDA farm loans can be used to purchase land, livestock, equipment, feed, seed, and supplies, or to construct buildings or make farm improvements. For beginning farmers and ranchers, USDA provides affordable credit, including loans under the Beginning Farmer and Rancher Program and Youth Loans. In addition, USDA provides grants under the Beginning Farmer and Rancher Development Program. The establishment of a coordinating office for USDA beginning farmer programs has supported education and training for more than 15,000 beginning farmers and ranchers. As part of ongoing efforts to streamline and modernize its service to American agriculture, Vilsack announced today that USDA is also seeking comments on a proposal to improve its Operating Loan Program to better meet the needs of small farmers with a new microloan program. Under the microloan proposal, producers who need a loan for less than $35,000 may apply using simplified and streamlined procedures. The program will cut the required paperwork in half and simplify the process to obtain a loan. The goal of the microloan program is to better meet the credit needs of small farm operations while making more effective use of FSA resources. Small farmers often rely on credit cards or personal loans, which carry high interest rates and have less flexible payment schedules, to finance their operations. The improvements aim to offer a more efficient processing time for smaller loans, adding flexibility to some of the eligibility requirements and reducing the application requirements. The proposed rule may be viewed at http://www.fsa.usda.gov/FSA/federalNotices?area=home&subject=lare&topic=frd-pi or through the FSA home page at http://www.fsa.usda.gov. Comments should be submitted no later than July 23, 2012 by either of the following methods: Federal eRulemaking Portal: http://www.regulations.gov. Follow the online instructions for submitting comments. Mail: Director, Loan Making Division (LMD), FSA, USDA, 1400 Independence Avenue, SW, Stop 0522, Washington, DC 20250-0522. Following is a breakdown of the loans to socially-disadvantaged producers in fiscal years (FY) 1999, 2008 and 2011, respectively: FY99 FY08 FY11 Direct Loans Direct Loans Direct Loans Loans 4,005 Loans 4,281 Loans 5,901 Volume $296 million Volume $379.4 million Volume $565.4 million Overall Socially Disadvantaged Producer Loan Portfolio* Individuals 15,906 16,910 18,114 Dollars $1.53 billion $1.97 billion $2.35 billion (guaranteed and direct) Through USDA's Strike Force Initiative, the department is helping to relieve persistent poverty in high poverty counties by accelerating assistance and improving participation in and access to our programs and services. Since Strike Force began, Farm Service Agency (FSA) loans have helped hundreds of minority producers in high-poverty counties in states with large populations of minority farmers and ranchers. Already in 2012, USDA has made 513 direct loans totaling nearly $45 million to producers in Strike Force counties—a 60-percent increase over the same period last year. Of the total, 74 percent of the loans have gone to beginning and socially disadvantaged producers. More information about the loans to Strike Force counties can be found below. Following is a breakdown of the loans to producers in the Strike Force states in FY 2011 and 2012: FY11 FY12* Arkansas Number of Direct Loans 59 97 Direct Loan Amount in Dollars $4,426,410 $9,113,450 Number of Guaranteed Loans 48 57 Guaranteed Loan Amount in Dollars $17,085,250 $22,261,980 Colorado Number of Direct Loans 70 97 Direct Loan Amount in Dollars $5,257,995 $8,474,330 Number of Guaranteed Loans 34 20 Guaranteed Loan Amount in Dollars $10,507,304 $8,192,600 Georgia Number of Direct Loans 126 175 Direct Loan Amount in Dollars $13,517,331 $18,533,690 Number of Guaranteed Loans 68 53 Guaranteed Loan Amount in Dollars $25,631,623 $19,035,270 Mississippi Number of Direct Loans 68 97 Direct Loan Amount in Dollars $3,330,945 $6,106,360 Number of Guaranteed Loans 16 20 Guaranteed Loan Amount in Dollars $7,049,638 $7,125,000 Nevada Number of Direct Loans 28 41 Direct Loan Amount in Dollars $1,637,300 $1,874,760 Number of Guaranteed Loans 7 1 Guaranteed Loan Amount in Dollars $2,869,000 $80,000 New Mexico Number of Direct Loans 0 6 Direct Loan Amount in Dollars $0 $755,000 Number of Guaranteed Loans 0 0 Guaranteed Loan Amount in Dollars $0 $0 # USDA is an equal opportunity provider and employer. To file a complaint of discrimination, write to USDA, Assistant Secretary for Civil Rights, Office of the Assistant Secretary for Civil Rights, 1400 Independence Avenue, S.W., Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 377-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).
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