Every year, Dustin Schlinsog walks into the Farm Service Agency office in Neillsville, Wis., to apply for a direct operating loan to support his greenhouse operation. It’s a small loan, under $35,000. Yet, he must complete 17 pages of paperwork and meet the same requirements for farm operations applying for loans of $300,000.
Agriculture Secretary Tom Vilsack announced last week the start of a new microloan program to assist beginning farmers, veterans and smaller farm operations. The program is designed to provide loans under $35,000 to help launch start-ups, provide needed resources and increased equity so farmers can graduate to commercial credit and expand their operations.
“I was surprised [this program was being offered] but I’m glad because it sounds like a good fit for me,” said Schlinsog, owner of Turnpike Greenhouse in Wisconsin.
Schlinsog began his greenhouse operation four years ago after closing his dairy operation and selling the cows. He now grows tomatoes, kohlrabi, lettuce and peppers along with a variety of flowers in his greenhouse. The microloan will help Schlinsog with operating costs and provide seeds, fertilizer and other materials for the upcoming growing season.
The less burdensome and more simplified loan process reduces the amount of paperwork from 17 forms to eight and the funds can be used for expenses such as hoop houses to extend the growing season, essential tools, irrigation, delivery vehicles and annual expenses such as seed, fertilizer, utilities, land rents, marketing and distribution expenses. The interest rate for microloans is currently 1.25 percent, but can change monthly.
“I have met several small and beginning farmers, returning veterans and disadvantaged producers interested in careers in farming who too often must rely on credit cards or personal loans with high interest rates to finance their start-up operations,” said Vilsack in a statement. “By further expanding access to credit to those just starting to put down roots in farming, USDA continues to help grow a new generation of farmers, while ensuring the strength of an American agriculture sector that drives our economy, creates jobs and provides the most secure and affordable food supply in the world.”
Vilsack announced the new program last week while speaking to a group of farmers in Memphis, Tenn. Since 2009, USDA has provided more than 134,000 farm loans to help farmers and ranchers grow or expand an operation – a record effort during a tough time for many producers to get a loan. The number of loans to beginning farmers and ranchers increased from 11,000 in 2008 to 15,000 in 2011. More than 40 percent of USDA’s farm loans now go to beginning farmers, while lending to socially disadvantaged producers increased by nearly 50 percent since 2008.
Producers interested in applying for a microloan may contact their local Farm Service Agency office.