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Rep. Jeanne Poppe thanks Governor Walz for signing bill to replenish funding for farmer loan assistance

Tuesday, March 17, 2020

Saint Paul, Minn. -- Governor Tim Walz today signed a bill allocating $50 million to the Minnesota Department of Agriculture’s (MDA) Rural Finance Authority (RFA) into law, allowing the RFA to continue offering eligible Minnesota farmers affordable financing and terms and conditions not offered by other traditional lenders. The Minnesota House and Senate approved the bill with near unanimous support. 

Without the investment, many Minnesota farmers would face a credit crunch caused by several years of low commodity prices and rising expenses. RFA loans are particularly important early in the year when Minnesota farmers review their finances and restructure debt ahead of the growing season.  

“Governor Walz has always been a friend and strong partner to Minnesota’s farmers, and signing this appropriation for farmer loan assistance into law is another milestone in a positive and fruitful relationship,” said Rep. Jeanne Poppe (DFL-Austin), chief author of the bill and chair of the Agriculture and Food Finance and Policy Division. “We are fortunate to have a Governor who cares so deeply about family farmers’ wellbeing and has his finger on the pulse of our agriculture industries, which contribute to our entire state’s economic health.” 

To date, more than $289.7 million has been invested in 3,094 loan participations by the RFA, and they have a strong record of success. Through December 31, 2019, the RFA bonded programs had loan losses (totaling $555,707) on only 21 loans since 1986, an outstanding loan balance of $94.4 million, and 626 active loan files. 

In the last two years, the RFA has seen increased participation in Beginning Farmer programs and increased numbers of bond funded loans issued. This increase can be partly attributed to the very low interest rates that RFA is able to offer, which are achieved through successful bond sales at interest rates as low at 2.15% in 2019. Education and outreach about these loans to farmers and lenders have increased their popularity. RFA loans are appealing to farmers and lenders during difficult economic times because the low interest rate also makes it easier to cash flow.