FSA offering loans for grain storage

The Farm Service Agency offers seven-year, low-interest loans to grain producers to build new or upgrade existing storage facilities and related essential, permanently affixed drying or handling equipment.

Loan opportunities include, but are not limited to:

  • new conventional-type cribs or bins, oxygen-limiting and other upright silo-type structures and flat-type storage structures designed for whole grain storage;

  • perforated floors, safety equipment, electrical equipment and concrete components considered essential for a fully functional storage facility;

  • remodeling existing storage facilities.

Marketing flexibility is the primary benefit gained from on-farm storage facilities. Privately owned facilities give producers control over where and when they sell their crops, increasing their odds of receiving the best price for their crop.

Farm storage facility loans must be approved prior to site preparation, equipment purchase or construction and must be secured by a promissory note and security agreement.

Special provisions apply for loan amounts exceeding $50,000. The maximum loan amount will be 85 percent of the net cost of the applicant?s needed storage or handling equipment, not to exceed $100,000 per borrower.

A minimum down payment to the supplier or contractor is required to bridge the gap between the net cost of the storage facility and the loan amount.

Fixed interest rates on farm storage facility loans are equivalent to the rate of interest charged on U.S. Treasury Securities of comparable maturity on the date the loan is approved.

As of April 2008, the annual interest rate is 3 percent.

For detailed applicant and facility eligibility criteria regarding Farm Storage Facility Loans, and to schedule an appointment to file an application, contact the Marion County office at 620-382-3714 or visit FSA on the Web at www.fsa.usda.gov.

 

Bill Harmon is executive director of the Marion County FSA office in Marion.

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