Help for farmers

Help for farmers

By Charlyn Fargo

Need a loan?

The state is here to help you – as long as you’re a farmer and plan to use that cash for your business.

A state program of low-interest loans for farmers has increased loan limits and revised guidelines in an effort to boost participation.

The Ag Investment Program, started in 2008, had not been significantly updated despite rising farm costs, said Illinois Treasurer Michael Frerichs, whose office administers the program. Under the changes announced in early January, annual loan amounts are up to $400,000 per farmer and $800,000 per farm operation. Previous limits were $300,000 per farmer and $600,000 per operation.

Interest rates through approved financial institutions range from 3.5 to 3.75 percent annually. The limit on a long-term loan program increased to $300,000 from $200,000. The changes, which were effective Jan. 1, also made refinancing easier, according to the treasurer’s office.

“No one was really using it. There was a small number of loans when I came into office,” Frerichs said. “The (loan) numbers were too low. The cost of farm inputs have gone up, the cost of machinery, fertilizer and fuel.”

Frerichs took office in 2014 and took over the Ag Invest program for farmers.

Currently, the Illinois agriculture industry employs one in four people, either directly or indirectly.

The Ag Invest program partners with banks and other financial institutions to provide farmers below-market rate loans to start or enhance their farming operations. The reduced interest rate loans lowers the overall cost to farmers to farm or in their alternative agricultural businesses.

Since 2008, Ag Invest has loaned more than $1 billion in annual and long term loans, making it one of the most expansive in the nation. However, farmers haven’t used the progam in the past few years.

Frerichs made changes to the program based on discussions with farmers, agricultural groups and lenders. Loans can be used for operating expenses and capital costs such as machinery, irrigation systems and building construction. The program is targeted to start-up operations, as well as to expansion of existing farms.

Frerichs said he expects interest in the state loans to pick up as a result of a slowdown in the farm economy.

“Part of the reason the numbers were down is because farmers had some fat years,” Frerichs said. “We’re entering a period of lean years, where they’ll need access to capital to stay in business and stay profitable.”

Here is a synopsis of the program:

Uses of Ag Invest Annual loans can include:

Seed, feed, fertilizer, plants, chemicals, cash rent, crop insurance, purchase of livestock/breeding stock, production-related energy and labor expenses, veterinarian costs, new or used farm equipment construction and irrigation and soil and water conservation.

Uses of Ag Invest Annual loans cannot include:

Land acquisition, refinancing, research or feasibility studies, mowing or landscaping equipment, two wheel drive or four wheel drive (full ton or lighter) trucks, loan application fees or other expenses not deemed part of a typical annual operating budget

To be eligible, a farmer must demonstrate that an Ag Invest loan assists in typical farming operations and the borrower’s property must be located entirely in Illinois.

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About the author

Charlyn Fargo spent 27 years at the State Journal-Register covering agriculture, business and food. She currently is the Bureau Chief of County Fairs & Horse Racing with the Illinois Department of Agriculture. She is also a Registered Dietitian and writes a weekly syndicated nutrition column for Creator’s News Service ( and is co-owner of Simply Fair, a fair trade boutique at 2357 W. Monroe in Springfield. She has bachelor’s degrees in agricultural communications and food from the University of Illinois, Champaign and a master’s degree in nutrition from Eastern Illinois University. She and her husband, Brad Ware, have a daughter, Kate, and son, Jayden. When she’s not working or writing, she enjoys baking cookies for Simply From Scratch, a company she formed to support faith-based ministries.

View all articles by Charlyn Fargo

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