The Minnesota House of Representatives on Monday approved legislation to replenish funding for a loan program that is popular among farmers working on startups or upgrading their operations, a House news release said.
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, loan applications are stacking up with no money available to lend.
"This program is an important tool and it was necessary for us to act swiftly to ensure funding is available to farmers," said Rep. Dale Lueck, R-Aitkin, in a news release. "This is particularly important at a time when ag commodity and livestock prices are under significant stress. This also is good news for our local banks who partner in making these important agriculture-related loans."
"As farmers start to prepare for the 2017 growing season, it was important for the House to act swiftly to replenish these funds," said Rep. John Poston, R-Lake Shore, in a similar release.
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. The RFA offers loans within the beginning farmer loan and seller assisted program, agricultural improvement program, debt restructuring program, and livestock expansion programs.
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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.
