The Farm Service Agency has a conservation loan program to assist farmers in implementing conservation activities included in a conservation plan or a forest stewardship management plan.
This loan program was initially set up as both a direct and a guaranteed loan program. For fiscal year 2014 Congress has only funded the guaranteed conservation loan program.
A written conservation plan or forest stewardship management plan must be included with the loan application. The guaranteed conservation loan funds can be used to:
• Install conservation structures to address soil and water resource issues.
• Install water conservation measures.• Establishment or improvement of permanent pastures
• Other purposes including the adaption of emerging or existing conservation practices, techniques, or technologies.• transition to organic or sustainable agriculture practices.
Some examples of conservation practices are manure storage structures including manure storage buildings, terraces, low-flow irrigation systems, fencing for livestock, developing water sources for livestock, transitioning to no-till, and other practices to reduce soil erosion and/or improve water quality.
The applicant for a conservation loan must meet the basic loan eligibility requirements except there is no “credit elsewhere” requirement and there is no limitation on the farm size as the operation can be larger than a family sized farm.
The guaranteed conservation loan is one part of the guaranteed loan program. Guaranteed farm ownership loans may be used to purchase farmland, construct or repair buildings and other fixtures, and to refinance debts.
Guaranteed operating loans may be used to purchase livestock, farm equipment, minor building improvements, and other operating expenses. Guaranteed operating line of credit loans can only be used for annual operating expenses.
FSA guaranteed loans can be up to a limit of $1.355 million for fiscal year 2014. The loan limitation is adjusted annually based on an agriculture inflation index. The loan term for farm ownership loans can be up to 40 years and for operating loans the term can be up to seven years.
The guaranteed loan payments can be scheduled to be paid monthly, quarterly, or annually. FSA guaranteed loans are made by local lenders such as Farm Credit, banks, and savings and loans. Farmers who are considering applying for an FSA guaranteed loan should contact their local FSA office or the farm loan team for their area to obtain information on guaranteed loans.
Additional information on Farm Service Agency farm loans can also be obtained from the FSA website at www.fsa.usda.gov.
That’s all for now,