WASHINGTON — Changes to the Farm Storage Facility Loan program have finally been implemented in accordance with the 2008 farm bill, which will allow producers of eligible commodities to obtain low-interest financing to build or upgrade farm storage and handling facilities.
The USDA Farm Service Agency (FSA) administers the loan program on behalf of the USDA Commodity Credit Corporation.
The maximum principal amount of a loan through the program is now $500,000, an increase from the previous $100,000 cap.
Participants are required to provide a down payment of 15 percent, with CCC providing a loan for the remaining 85 percent of the net cost of the eligible storage facility and permanent drying and handling equipment.
Loan terms of seven, 10 or 12 years are available, depending on the amount of the loan. Interest rates for each term rate may be different and are based on the rate which CCC borrows from the Treasury Department.
Payments are available in the form of a partial disbursement and the remaining final disbursement. The partial disbursement will be available after a portion of the construction has been completed. The final fund disbursement will be made when all construction is completed.
The changes also include a provision allowing borrowers to increase the down payment from 15 percent to 20 percent to avoid a severance agreement.
Applications for must be submitted to the Farm Service Agency county office that maintains the farm’s records. A loan must be approved before any site preparation or construction can begin.
The new regulations include the addition of eligibility for fruit and vegetable cold storage facilities and for hay and renewable biomass.
The following commodities are eligible:
Corn, grain sorghum, rice, soybeans, oats, peanuts, wheat, barley or minor oilseeds harvested as whole grain;
Corn, grain sorghum, wheat, oats or barley harvested as other-than-whole grain;
Pulse crops: lentils, small chickpeas and dry peas;
Fruits (including nuts) and vegetables: cold storage facilities.
For more information visit your FSA county office or www.fsa.usda.gov.