Bank of ND to launch $300M loan program for farmers hurt by low crop prices
BISMARCK, N.D. - North Dakota's state-owned bank is launching a $300 million loan program to help farmers struggling with low commodity prices and below-average crop production.
BISMARCK, N.D. – North Dakota’s state-owned bank is launching a $300 million loan program to help farmers struggling with low commodity prices and below-average crop production.
The state Industrial Commission voted Thursday to approve the Bank of North Dakota’s new Farm Financial Stability Loan Program. To be eligible, farmers must show evidence of a cash flow shortage in 2014 or 2015 and have an approved operating line of credit from a local lender for the 2016 crop year. The Bank of North Dakota will work with the local lender to restructure the farmer’s current debt with lower interest rates and longer payback periods to help the farm operation stay afloat.
“We’re just trying to get them through” until commodity prices recover, said Bob Humann, the bank’s chief lending officer. From 2012 to 2014, average prices of spring wheat, soybeans and corn dropped by 34 percent, 32 percent and 49 percent, respectively, according to data from North Dakota State University. But the prices of land rents, fertilizer and other inputs haven’t come down accordingly, Humann said, and median net farm income has plummeted from roughly $240,000 in 2012 to $55,000 last year.
The program is similar to the bank’s Farm Disaster Relief Loan Program created after widespread flooding in 1997, he said.
The state bank will take applications from Dec. 1 through June 30, 2016.