For Haywood County farmers, microloan gains popularity

Special to The Mountaineer
By Cindy Kernodle | Feb 22, 2013

Small, beginning farmers and producers, military veterans and disadvantaged producers interested in making a living in agriculture often are concerned about the high cost of purchasing land and equipment, compelling too many newcomers  to take financial risks by relying on credit cards and personal loans with high interest rates.

The Farm Service Agency’s (FSA) Farm Loan Programs division responded by developing a new microloan program that provides up to $35,000 to bolster these producers during start-up years.  It will assist small, established Haywood County producers, who find themselves in extenuating financial circumstances.

Like other operating loans, microloans can be used to purchase livestock, equipment, feed, seed, fertilizer and related supplies.  The real benefit  is that the current interest rate for a microloan is 1.125 percent.

Microloans are unlike traditional FSA loans.  Applying for a microloan is simpler, more flexible process.  By reducing the application from 17 pages to eight and modifying requirements for experience, it‘s easy  for Haywood County farmers and USDA employees.

Although some production experience is necessary, there are producers who may not meet the managerial requirements for traditional loans.  The good news is that they may be eligible for a microloan.  FSA will consider an applicant’s small business experience, experience with a self-guided apprenticeship and specialized education to meet the prerequisite.

As America 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 good for producers who want to grow niche crops and sell directly to ethnic markets, farmers markets or consumers.

Prospects previously using an FSA Youth Loan to finance an agricultural endeavor, successfully repaying the debt and are of the “age of majority” according to state law, are eligible for microloans.  Microloans graduate producers to a new level, further preparing them for larger FSA operating loans or commercial loans through the FSA Guaranteed Loan Program.

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.

Information on a microloan, or other FSA programs,  is available at the Haywood County FSA office or email

Cindy Kernodle is North Carolina’s acting state executive director for the N.C. USDA’s  Farm Service Agency.

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