The USDA has announced a low-interest microloan program intended to support small-scale local U.S. farmers that may not qualify for bank loans.
Geared towards growing the number of small family-run farms, particularly amongst minority and veterans turning to farming, farmers can borrow up to $35,000 as part of the program. According to USDA Secretary Tom Vilsack, one of the goals is to create more entrepreneurship and employment on farms. Starting small scale farmers out with government loans may help them over crucial hurdles in getting a farm running effectively and making them eligible for bigger loans in the future, said Vilsack.
The USDA has been increasing its loan program in recent years. In 2008 the agency gave out loans to 11,000 farmers and ranchers. In 2011 it was 15,000.
The loans are specifically targeted at the smaller farm operation, according to Vilsack, "It's about making sure that we have diversity within agriculture, that we have a good blend of large production facilities, medium-sized operations and smaller operations," Vilsack said. "It will help bolster the local and regional food system movement that is taking place." Farms could even be in urban areas, a trend that's growing all across major U.S. cities with city fruit and vegetable growers, beekeepers and even chicken farms thriving in urban areas such as Brooklyn and New York City. The number of growers who sell directly to the consumer via farmers markets has grown 60 percent in the last three years, according to Vilsack.
While the interest rates can change from month to month, they're currently at just 1.25 percent and farmers have seven years to repay the loans.
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Image: Christy McDonald