Throughout my tenure as state executive director for the Idaho Farm Service Agency, I have met several small and beginning farmers and ranchers, military veterans and disadvantaged producers interested in making a living in production agriculture.
For many, the high cost of purchasing land and equipment can be prohibitive, compelling newcomers and those struggling against odds to take risks to finance their dreams by relying on credit cards and personal loans with high interest rates.
I am keenly aware, too, that the average age of our farmers and ranchers is increasing. I am concerned about where the next generation of farmers and ranchers will come from.
The U.S. Department of Agriculture understands the needs of these small, beginning and specialty crop producers.
Through the FSA Farm Loan Programs division, the department responded to their needs by developing a new microloan program that will provide up to $35,000 to help bolster these producers during their startup years. Likewise, it will assist small, established producers who find themselves in extenuating financial circumstances.
Microloans are like other operating loans. They can be used to purchase livestock, equipment, feed, seed, fertilizer and related supplies. And here's a real benefit when compared to those credit cards and personal loans: The current interest rate for a microloan is 1.125 percent.
As the country moves toward more local food sources and joins the farm-to-table movement, there is an increasing number of people going back to the farm and selling their products through farmers markets and community-supported agriculture.
Microloans are perfect for those who want to grow niche crops to sell directly to ethnic markets, farmers markets or consumers.
Young future farmers and ranchers also will benefit. Prospects that previously used an FSA Youth Loan to finance an agricultural endeavor successfully repaid the debt and are of the "age of majority," according to state law, and are eligible for microloans. The microloan graduates producers to a new level and further prepares them for larger FSA operating loans or commercial loans through the FSA Guaranteed Loan Program.
By expanding access to credit, FSA continues to help grow the industry on which our country was built - agriculture. Through FSA, more than 128,000 loans totaling $18 billion have been issued. The number of loans to beginning farmers and ranchers has increased from 11,000 in 2008 to 15,000 in 2011. More than 40 percent of USDA's farm loans now go to beginning farmers, while lending to socially disadvantaged producers has increased nearly 50 percent since 2008.
At FSA, we aim for ways to help farmers and ranchers achieve their dreams, and to be part of the American population that feeds the world, whether they are large-scale or small-scale operations.
By supporting America's growers, we help all Americans. We provide a secure, low-cost food supply and make a major contribution to the U.S. economy. And we do these things while nourishing millions.
Dick Rush is the Idaho state executive director for USDA - Farm Service Agency.