Modernizing Ag-Link

MODERNIZING AG-LINK TO BETTER SERVE OHIO’S FARMERS

By Ohio Treasurer Robert Sprague

Forty-year high inflation. An unprecedented supply chain crisis. Record-breaking energy prices. Combine these nationwide economic challenges with the yearly concerns about weather and commodity futures, and Ohio’s agriculture industry faces roadblocks at every turn. Now, to create the perfect storm, the rise in interest rates is quickly increasing the cost of borrowing. Over the last year, I’ve been meeting with farmers, co-ops, financial institutions and other members of Ohio’s ag community to learn about how these challenges are impacting their operations and bottom lines. For more than three decades, our Ag-LINK program has helped farmers and agribusinesses save money by providing interest rate reductions on new or existing loans. Each year, borrowers use the program to finance upfront operating costs for feed, seed, fertilizer, fuel, equipment and other expenses. Despite Ag-LINK’s popularity and long track-record of success, my travels made it clear to me that there was much more our office could do to meet farmers’ borrowing needs. With that thought in mind, we recently enlisted a series of reforms to re-imagine and modernize Ag-LINK in a way that makes it more accessible for borrowers. In previous years, the Ag-LINK application period lasted only a few months. Now, loan applications are being accepted year-round. Transitioning to a year-long application period provides borrowers with greater flexibility and ensures they can access capital whenever they may need it most. This change also makes AgLINK more convenient for livestock farmers with different capital needs that occur throughout the year. The Treasurer’s office updates the interest rate reduction amount quarterly, based on real-time economic conditions. Currently, Ag-LINK is providing a 0.75% rate reduction on loans through eligible lenders. Additionally, our recently enacted Ohio Gains legislation updated certain investment strategies to generate further cost savings opportunities for the agriculture community. The legislation included a provision that adds agricultural co-ops to the list of eligible borrowers under Ag-LINK. Additionally, the measure removed outdated caps on loan amounts, allowing the program to keep pace with modern borrowing needs. Moving forward, the Treasurer’s office will assess and set loan caps annually. I’m proud to say we’ve seen a strong response to these improvements, resulting in a dramatic increase in Ag-LINK participation. So far in 2022, the Treasurer’s office is already set to support 1,300 loans across the state for a total of nearly $285 million – more than quadrupling the total amount in loans funded last year. That means savings of more than $1.4 million for borrowers. With interest rates rising, the rate reduction offered through Ag-LINK becomes even more meaningful – and we’ve already seen proof of this in action. Through these reforms, we’ve made Ag-LINK more convenient to use, while ensuring the program keeps pace with the ever-evolving borrowing needs of today’s agriculture industry. We’re proud to support Ohio’s agriculture community, and with these efforts, Ag-LINK is ready to serve the Buckeye State’s next generation of farmers. If you’re interested in using AgLINK, we encourage you to reach out to your financial institution to begin the application process. For more information, please visit our website at www.ohiotreasurer.gov/Ag-LINK.

Ohio Treasurer Robert Sprague