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.
“Agriculture is in many ways the lifeblood of our state, but it’s no secret commodity prices and other factors have put family farmers at a disadvantage,” said Rep. Chris Swedzinski, R-Ghent. “For those reasons alone it is important to have programs such as RFA loans available to people who are looking to improve their operations. It is good we brought urgency to the bill and passed it as a single item as opposed to waiting to include it in a bonding package sometime in May.”
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.