Michigan Ag Connection - Michigan Makes $15M Available for Farm Loan Interest Rate Reductions

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Michigan Makes $15M Available for Farm Loan Interest Rate Reductions
Michigan Ag Connection - 06/21/2019

The Michigan Legislature acted quickly Thursday to provide some relief to the state's farmers who are trying to keep their businesses viable as they continue to be deluged by unprecedented weather events.

With strong bipartisan support, both chambers passed House Bill 4234, effectively supplying $15 million to lending institutions, translating to more than $300 million in loan values, available to farm businesses in the form of interest rate reductions through the Agricultural Disaster Loan Origination Program.

More than 410 farmers made contact to state representatives and senators in advance of the vote.

"Farming is facing uncertainty that we haven't seen in years," Michigan Farm Bureau (MFB) President Carl Bednarski said. "It's humbling to see the Legislature understand what's happening and be willing to step up to the plate for our industry and we are grateful for their support and fast action.

"Having this additional tool available to our farm families helps the food and agriculture industry remain the strong economic driver and job provider it is today in rural, urban and suburban communities across the state." MFB Legislative Counsel Rebecca Park indicated Governor Whitmer is expected to sign the legislation.

"Naturally, now farmers are asking when the money will be available, are they eligible and how they can apply," Park said. "When the bill is signed into law, borrowers can contact their lending institution for application procedures and consultation on individual farmers' situations."

While HB 4234 provides funding, the Agricultural Disaster Loan Origination Program structure itself was already in state law--allowing it to be easily activated. Outlined within the law are base eligibility requirements:

- Any farmer that suffers a loss of 25% or more in major enterprises or production loss of 50% or more in any one crop.

- Agricultural businesses that suffer a 50% or greater loss in volume of one commodity.

- An individual engaged in retail sales direct to farmers that suffers a 50% or greater reduction in gross retail sales volume.

Go to https://bit.ly/2WRqBAV to see additional information about the base rate, loan terms and amounts.

"Lending institutions may have additional requirements or terms individuals will need to negotiate," Park added. "And, given the high-level of attention to emergency provisions at the federal level, it's important to note this state-level program is not commodity specific and is autonomous from federal program provisions."

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