How FHA's Microloans And Value-Added Grants May Fit Your Farm

New York' Farm Service Agency to host a mini-seminar on microloan and value-added producer grants at 2:15 p.m., Friday, Feb. 22 at New York Farm Show.

Published on: Feb 12, 2013

USDA wants to get the word out about two programs of great potential valuable for Northeast farmers.  One is the value-added producer grant program to aid in business development. The other is the new microloan program for operating costs of start-up farm businesses.

Learn all about both at a special New York Farm Show workshop hosted by state Farm Service Agency and Rural Development experts. This workshop is set for 2:15 p.m., Friday, Feb. 22, in the Arts and Home Center's Bistro Room at the New York State Fairgrounds. Both programs give priority to young farmers, beginning farmers, socially-disadvantaged farmers, veterans and small or medium-sized farms structured as family farms.

Discover How FHAs Microloans And Value-Added Grants May Fit Your Farm
Discover How FHA's Microloans And Value-Added Grants May Fit Your Farm

The VAPG program offers up to $100,000 for planning grants and $300,000 for working capital grants. It's goal is to help ag producers enter into value-added niche activities related to the processing and/or marketing of bio-based products, explains Gary Pereira, Rural Development's business program specialist. The grants require cash or eligible in-kind matching funds at least equal to the grant funds requested

The microloan program offers loans up to $35,000 for operating expenses at a current interest rate of 1.24%, according to George Wickswat, Schoharie FSA's farm loan manager. This loan application process has been streamlined to help small-scale, beginning and disadvantaged farmers, plus veterans during farm start-up years.

How microloans can be used
Microloans may be used to pay for initial start-up expenses such as hoop houses to extend the growing season, essential tools, irrigation, delivery vehicles, and annual expenses such as seed, fertilizer, utilities, land rents, marketing, and distribution expenses.

Eligible operating expenses include, but aren't limited to:
•Initial start-up expenses;
•Annual expenses such as seed, fertilizer, utilities, land rents;
•Marketing and distribution expenses;
•Family living expenses;
•Purchase of livestock, equipment, and other materials essential to farm operations;
•Minor farm improvements such as wells and coolers.
•Hoop houses to extend the growing season;
•Essential tools;
•Irrigation;
•Delivery vehicles.

Microloan applicants need to have some farm experience. FSA will consider an applicant's small business experience plus experience with a self-guided apprenticeship as a means to meet the farm management requirement. Limited experience may include working with a mentor during the first production and marketing cycle.