Low interest grain bin loans available for farmers

Producers who wish to store their commodities for a period of time prior to selling them may want to look into the possibility of receiving a low interest government loan to build their own on-farm storage facilities.

Low interest, seven-year Farm Storage Facility Loans are available through the local office of the Farm Service Agency (FSA) to build or upgrade farm storage and handling facilities. According to Robert Helmer, county executive director for the Farm Service Agency in Evangeline Parish, “Funds are currently available for producers to build or remodel farm storage facilities for a variety of commodities, including wheat, rice, soybeans, corn, and grain sorghum.” The current interest rate for loans disbursed in October 2008, is 3.25 percent.

Eligible facilities and equipment include bins, oxygen-limiting silo-type structures, re-manufactured oxygen limiting storage structures, structures that are upright, broken-type, horizontal or open structure silo with at least two concrete walls and a concrete floor, permanently affixed grain handling and drying equipment, and electrical equipment. All components must be new. Storage structures for commercial purposes, including the storage of grain for other producers whether paid or unpaid are ineligible, as are portable handling or drying and portable or permanent weight scales.

According to Helmer, borrowers must have a satisfactory credit history, demonstrate the ability to repay the loan, have no delinquent federal debt and indicate a need for increased storage capacity based on production. The maximum principal amount is 85 percent of the net cost of eligible components, not to exceed $100,000 for each borrower. Loans in excess of $50,000 must be secured by a first mortgage on real estate. A minimum 15 percent down payment is required. “Due to the new Farm Bill, changes are forthcoming on the maximum term and amount of the loan,” Helmer said.

Interested producers should contact the Evangeline Parish Farm Service Agency Office located at 205 Court Street, Ville Platte, or by calling 363-6602, extension two.