Traveling throughout California, I have worked with countless beginning farmers and ranchers, veterans, farmers market vendors, food entrepreneurs, urban agriculturalists, and many others interested in making a living growing the food that we consume. For most of these men and women, the daily costs of running even a small farming operation can test the mettle of the most committed farmer or rancher.
Many have resorted to funding their operating expenses on a credit card or with a high interest personal loan. Not surprisingly, the debt burden can quickly become overwhelming and too often the results are dashed hopes, deferred dreams or even bankruptcy.
Earlier this year, U.S. Department of Agriculture (USDA) unveiled a new micro-lending tool with smaller-scale, organic and beginning farmers and ranchers in mind. Since then, this new Microloan Program has been met with great enthusiasm all across the country.
USDA microloans can be used for almost any operating expense a farmer can incur. We can help fund initial start-up costs, annual expenses, livestock and equipment purchases, irrigation supplies, and much more. The application process has been streamlined and paperwork associated with our traditional loan programs has been reduced significantly. The Microloan Program even gives you credit for your “life” experiences as a small businessperson or apprentice if you don’t have traditional farming experience.
I like to say that the Farm Service Agency is in the American dream business and I know that every microloan we’ve made across the country has helped people achieve their own version of that dream. These loans are helping to build businesses, empower people, expand opportunity, and make sound investments in the rural communities where many of us live and work. The nuts and bolts of the program are pretty straightforward: $35,000 or less, an interest rate currently at 1.25 percent, a less bureaucratic application process, and a broad range of potential uses for loan funds.
USDA’s newest business tool will continue to play an important role in better serving the unique financial needs of farmers who are just beginning, farmer’s market vendors, CSA businesses and those who simply farm on a smaller scale. We are investing in today’s agricultural innovators, but are also sowing the seeds for the next generation of our nation’s farmers and ranchers.
Microloans are important investments not just because agriculture can provide the food, fuel and new jobs that will continue to build our economy and ensure a safe and affordable food supply, but because they provide access to the American dream. By expanding access to credit, we’re helping to grow one of the industries upon which our country was built. And with the USDA microloan, we’re doing it one farm at a time.