Washington, DC – U.S. Senator Michael Bennet, Congresswoman Betsy Markey and U.S. Senator Mark Udall today announced help is coming to Northern Colorado farmers affected by the closure of agriculture-focused New Frontier Bank and the economic crisis in the form of increased funding for the Farm Service Agency’s direct operating loans.
In a letter to the lawmakers, Agriculture Secretary Tom Vilsack confirmed he has authorized the transfer of unused FSA subsidized guaranteed operating loan funds to the agency’s direct operating loan program, which was facing a shortfall, as the Colorado lawmakers had pushed in a letter they sent to Vilsack last week. This transfer will provide an additional $110 million of direct operating loan funds and $143 million of unsubsidized guaranteed operating loan funds.
“This is welcome news for Northern Colorado farmers that will open up another credit option for them following the closure of New Frontier Bank. Northern Colorado farmers are the backbone of our local economy. We must work to find lending options for them and help them through this very tough economic crisis,” Bennet said. “The Farm Service Agency’s credit programs can help farmers stay in business, provide for their families and make it through these uncertain economic times. The funds transfer is a step in the right direction and we will continue to provide as much support as we can to help our farmers.”
“This announcement comes at a critical time for farmers and ranchers in Northern Colorado,” said Rep. Markey. “This move will help ensure that both loan programs are available to qualified farmers who urgently need the funds for spring plantings, farmhands and cow feed. I commend Secretary Vilsack’s quick response, and will continue to work closely with USDA to help farmers and ranchers weather this storm in Northern Colorado.”
“I am very happy that Secretary Vilsack responded to our calls and letters on behalf of thousands of farmers on the Eastern Plains,” Senator Udall said. “This assistance is going to be a real lifeline for farmers to help them get through tough economic times that have been made even tougher because of low commodity prices. And I’m going to keep fighting for funding and investments to help bring jobs and new prosperity to Colorado’s rural communities.”
With the funds transfer, the FSA will be able to provide approximately 1,900 family farmers with direct operating loan assistance and 620 family farmers with guaranteed operating loan funds. Additionally, Vilsack said in his letter that Colorado State FSA officials plan to have additional personnel to Weld County to facilitate the application process.
See below for a full copy of the letter sent to the officials:
Thank you for your letter of April 28, 2009, cosigned by your colleagues, regarding assistant for family farmers affected by the closure of New Frontier Bank in Weld County. I share your concerns that many farmers in Weld County will face difficulties as a result of this action.
As you know, in addition to some back closures, the recent instability in the credit markets has caused agricultural lenders to tighten lending standards, reducing the availability of financing, which makes obtaining credit more difficult for financially stressed farmers. This, along with a significant drop in milk, hogs and other prices, has caused more producers to seek financial assistance from the Farm Service Agency (FSA).
Your letter mentions the lack of funding for approved FSA direct operating (OL) loans in Colorado. In fiscal year (FY) 2009, the nationwide demand for FSA direct and guaranteed loans has increased dramatically. Due to this surge in loan activity, not only is the direct OL loan program experience a shortfall in loan funds, but shortfalls are projected to occur in the unsubsidized guaranteed OL loan program in FY 2009. There is also a very significant shortfall in direct farm ownership funds.
To compensate for the demand for extra funding, I have authorized the transfer of unused, subsidized guaranteed OL funds to two of the programs facing shortfalls. This transfer will provide an additional $110 million of direct OL and $143 million of unsubsidized guaranteed OL loan funds. I authorized this action on April 27, 2009, and have informed the Congressional Appropriations Committees. As a result of this transfer, FSA will be able to provide approximately 1,900 family farmers with direct OL assistance and 602 family farmers with guaranteed OL funds.
FSA is monitoring the requests for both direct and guaranteed loans and is committed to extending credit to eligible family-size farmers in Weld Count and elsewhere during these difficult times, as resources and statutory restrictions permit. Our Colorado State FSA officials have assured us that they will provide additional personnel to Weld County, if the need arises, to ensure that any applications received are processed in a timely manner.
On April 1, 2009, I announced that because of low dairy prices across the country, producers participating in the United States Department of Agriculture Milk Income Lost Contract Program will begin to receive payments. This action was taken to provide additional financial assistance to dairy farmers due to the economic crisis they face.
FSA is also using all available authorities to assist dairy farmers who currently have farm loans. On March 13, 2009, FSA provided guidance to all of its offices around the country to address the following issues: extending repayment terms for annual operating loans for dairy farmers; releasing milk proceeds for essential family living and farm operating expenses; notifying dairy farmers of options available to restructure their debt; and working with guaranteed lenders to provide assistance to dairy farmers.
Again, thank you for your letter. A similar letter is being sent to your colleagues. If I can be of further assistance, please do not hesitate to contact me.
Sincerely,
Thomas J. Vilsack
Secretary