Loans Help Farmers Rebound From 2009
February 18, 2010 : Cape Cod Times, by Sarah Shemkus
For many farmers last summer, a rainy June and a hot August meant limited — or non-existent — yields of tomatoes, strawberries and other crops.
And now a new loan program is aiming to help get these affected growers back on their feet.
MassDevelopment, along with agricultural nonprofit organizations Strolling of the Heifers and The Carrot Project, announced this week that it will be offering loans of $3,000 to $15,000 to help Massachusetts farmers finance capital investments and meet operating costs.
Up to $150,000 will be available, said Kelsey Abbruzzese, spokeswoman for MassDevelopment, the state’s finance and economic development authority. The development agency will be funding the program.
“The money comes from the fees we generate from our loans and bonds,” Abbruzzese said.
The program will focus on farms with less than 250 acres under cultivation and less than $250,000 in annual revenue. Farmers using or moving towards organic practices will also be given preference.
As of 2007, there were 406 farms in operation Barnstable County, according to statistics from the U.S. Department of Agriculture. Of these, 402 were smaller than 180 acres.
The average sales for a farm on the Cape totaled $43,475, according to the USDA numbers.
The loan term can be from one to five years. The interest rate is the five-year Treasury rate (2.3 percent yesterday) plus an additional 2.75 percent, although a minimum rate of 6.5 percent will apply. The deadline to apply for these loans is March 19.
The federal Farm Service Agency is also offering loans to growers hit by last summer’s weather. These loans are at a fixed rate of 3.75 percent, with a term of seven years. The application deadline is June 1.
The farm service loans allow growers to borrow up to $500,000, up to the amount of sales lost because of the weather. The MassDevelopment loans have a lower ceiling, but also allow borrowing for expansion activities and short-term operating needs.
For some local farmers who lost crops last summer, however, even a loan on easy terms is an expense they cannot afford.
“A loan is something that’s got to be paid back,” said Jay Sprout, owner of Sprout Farm in Mashpee, which had nearly its entire summer tomato crop wiped out last year.
“As a small farmer I cannot take on any loan or demand on my income that way,” he said. “So I basically have to bite the bullet on whatever crop I lost.”
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