USDA provides farm loans for underserved and new farmers

By Andi Anderson

The USDA Farm Service Agency (FSA) is committed to supporting underserved groups and beginning farmers through targeted farm ownership and operating loans. These programs aim to provide financial resources for individuals facing barriers to accessing credit.

FSA offers two types of loans: direct loans and guaranteed loans. Direct loans are provided directly by FSA, while guaranteed loans are issued by commercial lenders with up to 95% of losses covered by FSA. This guarantee enables lenders to support farmers who may not meet traditional credit requirements.

Additionally, the FSA provides Microloans designed for small, niche, or non-traditional farming operations. These loans cater to both ownership and operating needs, making them ideal for small-scale farmers and beginners.

To qualify as a beginning farmer, applicants must have less than 10 years of farming experience and actively participate in the farm's operations. Underserved groups include women, African Americans, Native Americans, Hispanics, Asians, and Pacific Islanders. These groups often face challenges accessing credit due to systemic barriers.

Julia A. Wickard, FSA State Executive Director in Indiana, highlighted the importance of these loans, stating, “FSA is committed to helping producers start and maintain their agricultural operations. Last year, $80 million in loans were obligated to underserved and beginning farmers in Indiana alone.”

Farm ownership loans help farmers purchase land, while operating loans cover costs like equipment, livestock, and supplies. By offering accessible financing options, the USDA ensures that more people can participate in agriculture and sustain their farming operations.

Photo Credit: usda