Ask FSA Andy: Youth farm loans available


Hello Again!

The Farm Service Agency has a loan program to assist rural youth to establish and operate income producing agriculture projects. The youth loan program is connected to participation in 4-H or FFA.

The project must be planned and operated with the assistance of their advisor and parents. The project must produce sufficient income to repay the loan. The goal of the loan is to provide the youth with practical business and an educational experience.

The eligibility requirements for a youth loan include:

— applicant must be between 10 and 20;

— must be a U.S. citizen;

— applicant must live in a rural area or a town of less than 50,000;

— applicant must be participating in 4-H or FFA;

— the youth must be conducting a modest, income producing, agricultural project;

— the 4-H or FFA Advisor must provide a written recommendation for the project;

— and the parents or guardian must provide a written recommendation and consent to the project.

The maximum loan amount for a youth loan is $5,000. This could be one loan or a combination of loans with a total of $5,000. The interest rate is fixed at the time the loan closes. The interest rate for March 2012 is 1.375 percent.

The loan will be secured by a promissory note(s) and by a lien on the chattel property purchased with the loan funds or products produced for sale. The repayment schedule for the loan varies with the type of project for which the loan is made.

For example, an annual operating loan to plant crops or for feeder livestock is due when the crops or livestock are sold.

For farm equipment or breeding livestock, the loan term can be up to seven years with an annual loan payment.

Youth loans can be used to finance many kinds of agricultural projects. The loan funds can be used to: buy livestock, equipment, and supplies; buy, rent or repair needed tools and equipment; and pay operating expenses for the project.

Examples of common projects are beef cows, dairy cows, sheep or goats, grain crops, produce crops, farm equipment, or annual livestock projects.

Additional information on Farm Service Agency rural youth loans is available at local Farm Service Agency offices or online at and clicking on farm loans.

The local FSA Farm Loan team can arrange to make a presentation about youth loans to 4-H, FFA, or other groups.

That’s all for now,

FSA Andy

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