Q: What is the Farm Storage Facility Loan program?
A: After months of delay, the U.S. Department of Agriculture in January finalized rules for a low-interest loan program designed to help farmers meet future grain storage and handling needs. The glut of grain worldwide has made extra grain storage all the more important. And the controversy surrounding a genetically modified seed corn last fall, which caused major distress to the grain handling system, underscores the need for increased storage capacity and segregation methods. This farm storage loan program is designed to give producers 'more room' to make key operation and marketing decisions regarding seed, segregation and sales. As a farmer-legislator, I understand how affordable storage options can factor into the bottom line and affect key marketing decisions. That's why I pushed for USDA to expedite the implementation of this program and broaden eligibility requirements. Specifically, I sought to include silage storage so livestock producers also could benefit from the low-interest loans.
Q: What are the terms of the loan program?
A: Under the final rules issued in January, farmers may borrow up to $100,000 for seven years to build or upgrade on-farm storage facilities. The interest rate charged will match the rates charged on comparable Treasury securities in effect during the month the loan is approved. The rate will remain in effect for the term of the loan.
I'm glad the USDA took my advice to expand eligibility to include silage storage facilities. What's more, the updated loan program offers new opportunities for other storage and handling equipment. The changes make new conventional cribs and bins, flat structures and facilities that are upright, horizontal or open silo structures with at least a 10-year 'life expectancy' eligible for the loan program. Grain handling and drying equipment also may be eligible if deemed by the local Farm Service Agency as necessary for the functioning of the storage system. Renovations to enlarge existing storage structures and add safety equipment such as lighting and ladders also may meet eligibility requirements. Concrete foundations, aprons and pits considered integral to the operation of the facility also may qualify. Applications may be obtained on-line at www.fsa.usda.gov. For more information, contact your local Farm Service Agency.