Farm Bureau Policy Development Fact Sheet No. 9 — 2012 SWINE PROBLEMS AND ISSUES ARKANSAS BEGINNING FARMER LOAN PROGRAM Arkansas’ program is administered by the Arkansas Development & Finance Authority (ADFA). It was designed to assist beginning farmers acquire agricultural property (land, buildings, equipment and breeding stock) at lower interest rates. The program enables lending institutions, individuals, partnerships and corporations to receive tax-exempt interest for direct loans or contract sales made to beginning farmers. The maximum principal amount of the loan cannot exceed $250 thousand. Used depreciable equipment not exceeding $62,500 may be included in this amount. Loans may not be used to acquire property from a related person. Funds to be used for the acquisition or construction of a residence may not exceed three percent of the principal amount of the loan. A person must be a "first time farmer" to be eligible for assistance under the program. A "first time farmer" is an individual who has not at any time had any direct or indirect ownership interest in substantial farmland which he operated or materially participated in operating. Substantial farmland is any parcel of land that has or has ever had a fair market value of $125 thousand and/or is larger than 15 percent of the median size of a farm in the county in which the parcel is located. To participate in the program, the borrowers and lenders will jointly submit applications provided by ADFA. The local lender arranges the loan, including the interest rate, length of loan, repayment schedule, security and collateral needed. The ADFA will issue a tax-exempt private activity bond to finance each loan. The loan and its collateral will be assigned to the lender as security for the bond. Similar programs exist within USDA-FSA and in other states such as Missouri and Iowa. These other programs are more lenient in several areas such as their definitions of a beginning farmer and purchases from relatives. Also, Arkansas’ program has been rendered essentially ineffective due to the current economic and interest rate environment and has not made a loan since 2007 or 2008. Related Policy: Government 157 1. 2. 3.
Is the current loan cap adequate? If not, what is the appropriate limit? Does Arkansas need to expand its program eligibility requirements? How could the program be modified to give young and beginning farmers and ranchers more access to capital?
OTHER ISSUES Animal Care and Well Being Surface Water Intake Protection Programs (SWIPPs) for Animal Feeding Operations (See Fact Sheet #2 – Environmental Issues)
[If you need additional information on these and other issues concerning the swine industry or if you desire assistance with your county policy development meeting, contact Evan Teague, Swine Division Coordinator at 501-228-1335 or via e-mail at evan.teague@arfb.com.]