Program helps farmers begin operation

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By Rick Greenwell

By Rick Greenwell

Washington County Extension Agent

As promised, this is a continuation of last week’s article on Understanding Ag Loan Programs.

What is the Beginning Farmer Loan Program?

The Beginning Farmer Loan Program is designed to assist individuals with farming experience who desire to develop, expand, or buy into a farming operation. Beginning farmers can qualify for financing to purchase livestock, equipment, agriculture facilities, to secure permanent working capital and to make a down payment on real estate or invest in a partnership or LLC.

Financing Terms

Fixed interest rate of 2 percent for up to 15 years.

Kentucky Agricul-tural Finance Corp-oration (KAFC) will loan up to $250,000 for new investments.

All KAFC Beginning Farmers Loans require a participating lender and KAFC participation will be limited by the type of project being funded.

Applicant Eligibility

Applicants shall qualify as a Beginning Farmer if they meet each of the following requirements:

Have participated in the business operation of a farm for at least three years.

Substantially participates in the operation.

Have not operated a farm for more than ten years.

Applicant (and spouse, if applicable) must have a combined net worth of less than $500,000 at the time of application.

Applicant’s personal off farm income and total household income must meet minimal eligibility requirements.

Eligible Financing Includes livestock, equipment, agriculture facilities, down payment on real estate and funds to invest in a farm partnership, LLC, or other farm business structure

Other agriculture investments

Governor Beshear and the Kentucky Legislature continue their commitment to the agricultural diversification efforts being made across the Commonwealth. In 2002, the Kentucky Agricultural Development Board, as part of the Long-term Plan for Agricultural Development, recommended that the KAFC be restructured to provide capital access for agricultural diversification and infrastructure projects. KAFC was moved to the Governor’s Office of Ag Policy from the Kentucky Department of Agriculture in 2004.

The Kentucky Agricultural Finance Corporation also provides financing through the Agricultural Infrastructure Loan Program. This program is designed to finance on-farm capital improvements.