Media contact:
Misti Preston
Phone: (573) 751-8596
Misti.Preston@mda.mo.gov

For Immediate Release: June 19, 2008

New Farm Bill Expands Opportunities for Missouri’s Beginning Farmers

(JEFFERSON CITY, Mo.) – The recent authorization of the 2008 Federal Farm Bill included changes in the Aggie Bond program that will make Missouri’s Beginning Farmer Loan Program more beneficial to agricultural producers wishing to make their first major farmland purchase. The Farm Bill has increased the maximum amount available to beginning farmers through the Beginning Farmer Loan Program to $450,000. The program is designed to encourage lenders to offer lower interest rate financing to those starting a career in production agriculture.

The Missouri Agricultural and Small Business Development Authority (MASBDA), housed at the Missouri Department of Agriculture, administers the farmer loan program which, in cooperation with local lenders, assists beginning farmers across the state in acquiring agricultural property at reduced interest rates.

"With the increase in the value of farmland in recent years, this change will greatly benefit young people wishing to purchase their own ground," said Katie Smith, director of the Missouri Department of Agriculture. "A lower interest rate results in a more positive cash flow, which is critical for young people facing the challenges of entering production agriculture. We must continue to do everything we can to encourage young farmers to choose careers in agriculture."

The program enables lenders to receive federally tax-exempt interest on loans made to beginning farmers. The tax savings are passed on to beginning farmers in the form of lower interest rates. The new Farm Bill increases the maximum bond amount from $250,000 to $450,000, enabling lenders to make larger loans utilizing the lower interest rate.

Since the program’s inception in 1985, MASBDA has participated with Missouri lenders in 260 loans totaling $31.4 million. To qualify as a beginning farmer, an applicant must meet the following criteria:

1. The borrower must be a Missouri resident.
2. The proposed projects must be located within Missouri.
3. The borrower must be at least 18 years old.
4. The borrower’s net worth must not exceed $200,000 and he/she must have adequate working capital and experience in the type of farming operations for which the loan is sought.
5. The borrower cannot have owned agricultural real estate of more than 30 percent of the median size farm in the county where the farm is being purchased.
6. After the loan is closed, the borrower’s chief occupation must be farming or ranching. (This requirement does not prohibit off-farm employment, but gross farm income must exceed any off-farm income.)

For additional information about the Beginning Farmer Loan Program, please contact MASBDA at (573) 751-2129 or visit the Missouri Department of Agriculture’s Web site at www.mda.mo.gov to download a complete set of program guidelines and application.

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