Minnesota farm loan program wins approval in time for spring
ST. PAUL — Unseasonably warm weather is making Minnesota farmers itchy to get into the fields, but some have not ordered seeds while they wait to know their financial standing.
Soon, they should have that answer if Gov. Mark Dayton does as expected and signs legislation to pump $35 million into a farmer loan program.
Minnesota senators voted 62-0 in favor of the bill Thursday, Feb. 16, following House members' action a week earlier.
The legislation does not provide loans for farmers to buy seeds, fertilizer and other things they need in the spring, but it does help them pay mortgages and other major expenses that affect how much money they have available for spring planting.
"The Rural Finance Authority is an important program and provides much needed assistance to farmers across our state, but it has run dry," said Sen. Andrew Lang, R-Olivia, who sponsored the legislation.
The authority, formed in 1986, has issued $215 million in loans to 2,888 farmers.
"It is critically important," President Kevin Paap of Minnesota Farm Bureau said. "We are at that time of year we need to make plans and we need that certainty."
Lang said his bill is an indirect help for planting season, and Paap added: "It is just about dollars available. ... If you are going to pay the bills, you have to have that commitment."
Legislators normally fold finance authority funding into a public works bill they pass in even-numbered years. That bill did not pass last year, and finance money ran out at the end of the year.
In order to resume loans, Lang and Rep. Tim Miller, R-Prinsburg, offered the bill that stands on its own.
The state and banks work together to provide the loans, which usually come with 3 percent to 4 percent interest rates. The loans are available for several uses, including adding to facilities, helping new farmers buy farmland, restructuring farm debt and constructing state-of-the-art livestock facilities.
"With a strong demand for restructure loans due to low commodity prices, I'm pleased the House recognized the importance of RFA loans and took quick action on this bill," Miller said.
On the other hand, Rep. Rick Hansen, D-South St. Paul, warned his colleagues that farm loan programs are not the only things that missed funding when last year's public works bill collapsed. "There's a lot of urgency in Minnesota in undone work that didn't happen last year."
No one voted against the measure in the House and Senate.