Jan 7th 2008, 09:43

Financial Aid for Beginning Farmers

The US Department of Agriculture (USDA)'s Farm Service Agency (FSA) aims to help farmers and ranchers to meet the growing demand for food supply throughout the country. To make sure that there are enough farmers who can help meet that demand, the FSA has launched the Farm Loan Program for beginning farmers or ranchers who can't get loans from commercial credit sources like banks and private lending companies.

Eligible applicants can get direct loans of up to $200,000 and guaranteed loans of up to $949,000 to help them fund their farm-related expenses like the following:

• Land ownership;
  
• Farm/ranch ownership;
  
• Building construction and other improvements;
  
• Soil and water conservation;
  
• Operating expenses like livestock, poultry, equipment, feed, seed, farm chemicals and supplies;
  
• Refinancing indebtedness; and
  
• Emergency/disaster damage costs.

Farmers and ranchers can take advantage of this benefit if they meet all of these conditions:

• Has not operated a farm or ranch for more than 10 years;
  
• Meets the loan eligibility requirements of the program to which he/she is applying;
  
• Substantially participates in the farm operation; and
  
• For Farm Ownership (FO) loan purposes, doesn't own a farm larger than 30 percent of the average size farm in the county. Please note: All applicants for direct FO loans must have participated in business operation of a farm for at least 3 years.
  
• If the applicant is an entity, all members must be related by blood or marriage, and all stockholders in a corporation must be eligible beginning farmers.

If you wish to own a farm, you have two loan options:

1. Down Payment Farm Ownership Loan Program where: 

• You're allowed to provide only 10% of the purchase price
  
• FSA may then cover 40%
  
• Remaining amount can be funded by another lender.

2. Joint Financing Plan where:

• FSA pays 50%
  
• Another lender covers the other 50%.

To know more about this program, you can visit: http://www.fsa.usda.gov

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