The Farm Service Agency has a loan program to help rural youth establish and operate income producing agriculture projects. The youth loan program is connected to their participation in 4-H or FFA, and the project must be planned and operated with the assistance of their adviser 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 educational experience. The eligibility requirements include:
— applicant must be between 10 and 20;
— must be a U.S. citizen and live in a rural area or a town of less than 50,000;
— the youth must be conducting a modest, income producing, agricultural project;
— a 4-H or FFA adviser 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 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.
Currently the New Philadelphia farm loan team has 70 youth loan borrowers in the six-county area. These include 52 with beef cow-calf projects, one dairy cow project, three sheep and goat projects, three with annual operating loans, six with equipment purchases, and five financed a building to house their annual livestock project.
We have had several youth with beef cow-calf projects who paid off their first loan and obtained a second loan to purchase additional beef cows to add to their herd. One young lady of 12 borrowed $5,000 to purchase four purebred Boer billy goats and 35 nannies. Each year she sold club kids and meat goats. At the end of five years, she had increased her goat flock to 70 nannies and had paid off her youth loan plus paid her annual operating expenses.
Additional information is available by contacting your local Farm Service Agency county office or at www.fsa.usda.gov and clicking on “farm loans.”
That’s all for now,
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