Farm dreams BY JON RUTTER, Staff Writer
When he heard about Washington's new microloan program for up-and-coming small farmers, Chad Ibach didn't mince words.
"It's radically exciting!" said Ibach, who sells Lancaster Farm Fresh Cooperative produce at Central Market.
"I'm looking to start my own farm," added Ibach, 25. "That's my dream."
A government loan could help him fast track the idea.
The U.S. Department of Agriculture initiative announced last month provides just such a helping hand.
Loans range up to $35,000. The interest rate currently is 1.25 percent and might change monthly, according to USDA.
Farmers typically will pay back loans covering operating costs in a year; loans for capital purchases must be repaid in seven years.
The money is distributed through local USDA Farm Service Agency offices.
The feds have given out microloans before, said Bill Wehry, Pennsylvania executive director for the Farm Service Agency in Harrisburg.
But one aspect that's different in 2013 is the streamlining of the application form to an approachable seven pages.
"The really great thing about it is it really simplifies the process (and) literally cuts the paperwork in half," Wehry said.
And this time around, the program seeks to tap the booming interest in locally produced food sold directly to consumers.
Said Wehry: "The real idea behind this is just to provide more flexible access to credit" for startups, part-timers, organic producers and community-supported agriculture operators –– anyone who might not qualify for, or need, a giant loan.
Loans can be used to pay for seed, equipment, marketing, livestock, "even a hoophouse or something like that," said Wehry, referring to heatless greenhouses used to extend the growing season for some crops through the winter.
While Ray Scheaffer Jr., USDA farm loan specialist in Harrisburg, acknowledged that the prime-based interest rate can vary monthly, he said the prime has been steady and the ag lending rate typically changes only a tenth or so of a percent a month.
The microloan potential is big, according to Wehry and Scheaffer.
While the standard farm operating loan is $300,000, they say 71 percent of all farm operations grossed less than $25,000 in 2007.
Last year in the state, USDA made nearly 150 ag loans classified as microloans.
This year, Wehry predicted, "I think this program will take off in Pennsylvania."
"The field offices have had a lot of inquiries" since the program was announced Jan. 14 by Agriculture Department Secretary Tom Vilsack, Scheaffer said.
Lancaster's Farm Service Agency loan officer, Tiffany Lutz, wasn't immediately available for comment.
Peggy Fogarty-Harnish, a local food safety educator with Penn State Extension, lauded the government's focus on small farmers.
The county stands out as being "one of the lead places" in the nation where small farmers share infrastructure, she said; microloans appear custom-made to help.
Leon Ressler, the extension director for Lancaster, Lebanon and Chester counties, acknowledged that the low interest rate on the loans sounds like a "pretty good deal."
But he added that the lending arrangement might be less enticing to Plain-sect farmers, who traditionally avoid dealings with the government.
A farmer selling his vegetables at Central Market on Tuesday backed that view of the program.
"It's aimed at young farmers who tend to be pie-eyed" and optimistic, said the man, who asked not to be identified.
People have to be careful about any loan, added the farmer, who labeled himself "skeptical" of the government initiative.
But Ibach, the Lancaster Farm Fresh co-op seller, said he was intrigued by the idea of a $35,000 microloan.
"It sounds like a fantastic opportunity" for someone with no capital and no ground, he said.
Ibach added that he's tentatively planning to start farming someone else's property this spring.
"With that much money," he noted, "I could buy my own piece of land."
nNew USDA microloan program provides funds for ventures through a simpler application.