ST. PAUL – The Minnesota House of Representatives on Monday approved legislation that will replenish funding for a loan program that is popular among farmers working on start-ups or looking to upgrade their operations.
The bill (H.F. 14) appropriates $35 million to the Rural Finance Authority for loans to eligible farmers. The norm is for RFA funding to be provided through capital investment bills but, with no bonding bill approved in 2016, the pot ran dry.
“We needed to take care of this right away to help people plan for the upcoming season,” said Rep. Jeff Howe, R-Rockville. “This has been a very successful program over the years, so it really was a no-brainer that we had to get this funding piece in place to keep it going and time is too precious to wait around until the end of May to put it in a bonding bill.”
The RFA partners with agricultural lenders to provide low-cost financing to farmers on terms and conditions not otherwise available from other credit sources. The RFA portion of the loan is carried at a reduced interest rate to improve the cash flow of eligible farmers. RFA offer loans within the beginning farmer loan and seller assisted program, agricultural improvement program, debt restructuring program, and livestock expansion programs.
The bill calls for $35 million in bond proceeds to be allocated for future RFA loans. These bonds are 100-percent user-financed, meaning the state will be paid back.
The bill now is in the hands of the Minnesota Senate for consideration.
More information on RFA programs can be found at www.mda.state.mn.us/agfinance or by calling (651) 201-6556.
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