, Muskogee, OK

January 21, 2013

Startup farm loans offered

Program seen as way to bolster farmers’ markets

By D.E. Smoot
Phoenix Staff Writer

— Small-scale agricultural producers and those who want to get a new operation off the ground could benefit from a new microloan program offered by the U.S. Agriculture Department.

The program is designed to help small and family operations, beginning and socially disadvantaged farmers. It offers a simplified loan application process and a path toward financing for those who want to grow niche crops to sell directly to ethnic markets and farmers’ markets.

The program offers low-interest loans of up to $35,000 that could be used for initial startup costs such as essential tools and equipment. Loan proceeds also may be used for annual expenses such as seed, fertilizer,  marketing and distribution.

Jack Carlile, a farm loan manager for the Farm Service Agency office in Tahlequah, said the program’s rules are “less restrictive” than those for loans for established producers.

“This falls under the category of helping people get started where before they might not have been able to qualify for assistance,” Carlile said, noting that the rules were finished just last week. “They (applicants) would have to have some experience and a business plan, but it’s going to help those people who typically don’t have a background in management get a project started and off the ground.”

 Doug Walton, coordinator of the Muskogee County Turning Point Coalition’s food and fitness initiative, said the microloan program could be a boon for producers who sell to farmers’ markets and local or regional food cooperatives.

“It looks like this program will be a great opportunity for new farmers and small-scale producers, who often lack the resources to initially get off the ground,” said Walton, who is also the assistant manager of the Muskogee Farmers’ Market. “The costs of equipment, supplies and structures needed to get started can be quite expensive. A program like this could prove beneficial to those who are interested in starting a small-scale operation.”

Phil Estes, the Farm Service Agency’s farm loan program chief in Stillwater, said the agency funded the state’s first microloan Friday and “several more are in the pipeline.” He said the new program is considered “high priority” because it has the potential to spur renewed interest in farming and ranching.

“I think they realize we have some areas of agriculture that could benefit from this type of support,” Estes said. “We have the small truck farms that like to sell to farmers’ markets and small operators who may have just 20 or 30 goats — we can get in there and help these types of operators.”

The microloan approved Friday, Estes said, was for the purchase of a bull and 20 cows. He said the borrower’s business plan is an example of the type of project the microloan program is intended to benefit.

Estes said the agency expects borrowers to generate at least $1,000 a year in agricultural-related income. At that level, a producer may be included on the farm census and may be eligible for other programs designed to help producers expand.

Both Estes and Walton said the program should also benefit farmers’ markets and food cooperatives. Walton said more local producers will “help strengthen the local food infrastructure,” giving consumers more options for healthy, fresh and locally grown products.

Federal agriculture officials said a record amount of USDA farm loans have been made through the Farm Service Agency since 2009: more than 128,000 loans totaling nearly $18 billion. The federal agency has increased the number of loans to beginning farmers and ranchers from 11,000 in 2008 to 15,000 in 2011.

More than 40 percent of USDA’s farm loans now go to beginning farmers. In addition, the USDA has increased its lending to socially disadvantaged producers by nearly 50 percent since 2008.

Estes said potential borrowers should visit their county’s Farm Service Agency. Loans will be made first-come, first-served.

Reach D.E. Smoot at (918) 684-2901 or