The Farm Service Agency (FSA) has added a new Conservation Loan program. The Conservation loan program provides farmers with the credit necessary to implement conservation measures on their land. This loan program is in partnership with the Natural Resources and Conservation Service to provide up front funding to implement conservation practices.
The goal of the FSA Conservation loan program is to provide farmers access to credit to implement practices to conserve natural resources.
The direct Conservation loan limit is up to $300,000 for direct loans. Guaranteed Conservation loans can be up to $1,119,000 (amount adjusted for inflation) and may be available by applying with lenders working with FSA to obtain a guarantee.
The Conservation loan term can be up to 7 years for chattel improvements and up to 20 years for real estate improvement projects. The loan must be fully secured and can only be approved for those who have the ability to repay the loan. Applicants will need to work with the Natural Resources and Conservation Service (NRCS) staff to develop a conservation plan.
The conservation plan is a written record of the conservation practices to be implemented, the requirements of the practice, and any specifications or construction plans. Conservation practices must be approved by NRCS before FSA can provide financing.
Examples of conservation practices include installation of conservation structures; installation of water conservation measures; establishment or improvement of permanent pastures including fencing; manure management structures; manure digestion systems, etc.
Conservation loan funds can also be used by a farm operation to transition to organic production or sustainable agriculture practices. The Conservation loan funds can only be used to cover the cost of carrying out the qualified conservation project or projects.
Conservation loan funds will be targeted to beginning farmers, socially disadvantaged farmers, and to establish conservation practices to comply with highly erodible land regulations.
The FSA general loan eligibility requirements apply to Conservation loans with the exception of the test for credit elsewhere and the limitation of a family sized farm.
The proposed funding for Fiscal Year 2012 does not include funding for direct conservation loans but does include funding for guaranteed conservation loans.
Presently funding is available in Fiscal Year 2011 for direct and guaranteed conservation loans. If a farm operation is considering applying for a direct conservation loan, the process should be started as soon as possible while funding is available.
For more information on the Conservation Loan program, contact your local FSA office to setup an appointment with a Loan Approval Official. Or visit the FSA website at: www.fsa.usda.gov. for more information.
That’s all for now,
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