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Hurricane recovery farm loan program 'great help
Farmers and agri-business owners from Concordia and Catahoula parishes were updated Tuesday on a new low-interest farm loan program designed to help them recover from losses caused by heavy rains dumped by hurricanes Gustav and Ike last year.
Under the program, administered by the Louisiana Agriculture Finance Authority (LAFA), both farmers and agri-businesses can obtain 1.5 percent loans, while 20 percent of the total a farmer borrows will be in the form of a grant and not have to be repaid. The application process will begin next month.
County Agent Glen Daniels said the program "will be a great help to farmers to pay off high interest rate loans. This is designed to keep farmers in business and this money will be used in the community."
A number of officials from the Louisiana Department of Agriculture and a representative of the governor's office attended the meeting.
Randy Rogers, director of LAFA, said the funds are available as a result of a meeting held last year between Louisiana Commissioner of Agriculture Mike Strain and officials with the Department of Housing & Urban Development (HUD) in Washington, D.C.
He said HUD is providing the funding.
LAFA will function as a bank, process the loan applications, make the loans and service the accounts. The loan program is based on losses and will not conflict with other programs, according to Roy Johnson, Director of the Farm Recovery Program in Louisiana.
Johnson said $34.5 million is available statewide to farmers and $10 million to agribusinesses, noting that Louisiana's agriculture industry lost $1 billion from the storms last year. Seventy percent of the cotton crop was lost.
Any applicant must borrow a minimum of $10,000. Farmers can borrow up to $100,000, while agri-businesses came borrow up to $250,000. The payback period is from five to 10 years.
Johnson said loans require only a signature and are not collateral-based. Applicants must provide copies of tax returns to prove losses.
Farmers can use the funds to recover costs from 2009 planting expenses and crop management and 2009 harvest costs. The loans can also be used to repair storm damaged equipment, replace animals lost in 2008 from the hurricanes or pay off or pay down 2007, 2008 and 2009 crop production loans.
Agri-businesses that qualify for loans must have suffered losses related to production agriculture, Johnson said. Among the businesses that qualify are agriculture consultants, flying services, ginners, loggers and truckers. Inventory and equipment losses are also included in the program.
Daniels said this program couldn't come about at a better time.
"Now we were are in the middle of a drought and according to the state climatologist this dry, hot water is going to continue for at least another week," said Daniels. "This is really serious for farmers without irrigation systems. We haven't had a rain in about a month."
He said two major hurricanes are being predicted this year.
"That makes us worry about all of our late-planted crops getting caught in a hurricane this year," said Daniels. " |
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