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 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.
“This program has been very popular over the years because it makes it easier for people to acquire a farm or make on-farm improvements,” said Rep. Dean Urdahl, R-Acton Township. “Instead of waiting until the end of May to include this funding in a bonding package, we brought urgency to the issue to help farmers with the planning process for the upcoming season.”
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.