New farmers may get some seed money

A new public-private loan program may make it easier for beginning farmers to enter their chosen field.

Offered by Northwest Farm Credit Services and the Washington State Housing Finance Commission, the Beginning Farmer/Rancher Program aims to help first-time Washington farmers get lower interest rates on loans worth as much as $250,000. The program is authorized to issue loans for construction and agricultural improvements or buying land, machinery and livestock totaling $2 million this calendar year.

Northwest Farm Credit Services – a Spokane-based, customer-owned lending association – has already received 28 applications, including several from Eastern Washington, said Wendy Knopp, an assistant vice president.

The program is intended to “address concerns about the increasing average age of existing farmers and the decreasing number of full-time commercial farms in Washington,” according to a state news release.

“Interest and enrollment in agricultural programs at Washington’s colleges and universities is high, but many with the interest and education lack the financial resources to get started,” according to the release.

Knopp said agricultural loan interest rates can be steep for young and beginning producers because of high risk levels. Some new farmers also might lack the capital needed to invest in expensive property, she said.

The Washington Legislature approved the program in 2006, but the commission wasn’t ready to authorize loans until this year, said Liz Green-Taylor, manager of the state’s Bond Cap Allocation Program.

Financed by tax-exempt bonds issued by the commission, the loans may offer interest rates about two points below prime, Green-Taylor said.

Because the lending institution won’t pay taxes on income from the loans, it can pass those savings on to the farmers through lower interest rates, said Sharonn Meeks, senior finance associate for the commission.

Applicants may receive a maximum of $250,000 for land and improvements, $125,000 for new, depreciable agricultural property and equipment and $62,500 for used, depreciable property and equipment.

Only people who have not owned a farm or who owned a farm measuring less than 30 percent of the county’s median farm size and valued at less than $125,000 are eligible. Loans are also limited to one per family.

For more information, visit www.wshfc.org/farmranch.