Small farmers, especially minority, socially disadvantaged and beginning farmers and ranchers often have trouble qualifying for small loans from banks or other lenders. But now, thanks to a new USDA loan program, beginning farmers and ranchers are eligible to apply for micro-loans of up to $35,000, designed to help bolster family-run farms and ranches and help disadvantaged individuals and military veterans seeking to start a farm or ranch.
These smaller loans are intended to cover smaller purchases, such as seeds, animals, small equipment, or other investments that beginning farmers and ranchers require to finance their operations. The loans will also help farmers and ranchers seeking to grow niche or organic crops to sell directly to ethnic and farmers markets, or contribute to community-supported agriculture programs.
Applicants must secure micro-loans with collateral in the form of farm or ranch property worth at least 100 percent of the loan or provide a third-party pledge of security or co-signer when necessary. The application process is simplified and requires less paperwork than traditional farm loans.
We applaud USDA for this initiative and what it could mean to beginning farmers and ranchers as well as local food systems throughout rural America. Farmers and ranchers interested in applying should contact their local Farm Service Agency office. Likewise, the Center for Rural Affairs has established a hotline where farmers and ranchers can obtain the latest information on this and other USDA programs – just call 402-687-2100 and ask for Traci Bruckner or Virginia Meyer.
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