Ask FSA Andy by FSA Andy– disaster area designation and loans available

Hello Again!
On Sept. 5, 2012, U.S. Agriculture Secretary Tom Vilsack designated all 88 counties in Ohio as natural disaster areas due to drought and excessive heat that occurred from Feb. 1, 2012 and continued. The designation also included five counties in Pennsylvania and eight counties in West Virginia as contiguous disaster areas.

Application deadline

This gives all qualified farm operators in the designated areas the opportunity to file an application for low interest emergency (EM) loans from the Farm Service Agency, provided eligibility requirements are met.

Farmers in the eligible counties have eight months from the date of the disaster declaration to apply for EM loans to help cover part of their actual losses. For this disaster designation, farmers in eligible counties have until May 6, 2013, to apply for EM loss loans.

FSA will consider each loan application on its own merits, taking into account the extent of losses, security available, and repayment ability. A farm operation must have suffered at least a 30 percent loss in crop production because of the disaster in comparison to the previous three years production history.

Emergency loan funds can be used to pay all or part of production costs associated with the disaster year, refinance certain debts or open accounts, reorganize the farming operation, or used to restore essential property.

Guaranteed loans

FSA makes and guarantees loans to assist farmers who are unable to obtain financing from commercial lenders. In many cases these are farm operators who are beginning farmers who lack the required equity or farm operating experience, farmers who have suffered financial setbacks from natural disasters such as this year’s drought, or farm operations who are expanding.

 FSA guaranteed loans can be line of credit annual operating loans, term operating loans, or farm ownership (real estate) loans. Guaranteed loans can be used to restructure farm debts. As of Oct. 1, 2012, the FSA guaranteed loan limitation for fiscal year 2013 has increased to $1,302,000.

Targeted loan funds

Each fiscal year FSA targets a portion of its direct and guaranteed loan funds to beginning farmers and Socially Disadvantaged Applicants. A beginning farmer is someone who has not operated a farm for more than 10 years and meets the loan eligibility requirements for the loan for which they are applying.

Socially disadvantaged applicants consists of American Indian, Alaskan Native, Asian, African American, Native Hawaiian, Hispanic, and women farmers. The targeted loan funds include operating loans and farm ownership loans.

Youth loans

FSA has a loan program to assist rural youth establish and operate income producing agricultural projects. Youth loans are connected to participation in 4-H or FFA. The project must produce sufficient income to repay the loan.
Youth loan funds can be used to buy livestock, equipment, supplies, 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, and annual livestock projects. Youth loans are limited to a maximum of $5,000. The applicant must meet the eligibility requirements for a youth loan. The applicant must be between 10 and 20 years of age.
Additional information on FSA loan programs can be obtained by contacting your local Farm Service Agency County office or the FSA website www.fsa.usda.gov and clicking on “farm loans.”

That’s all for now,
FSA Andy