Storage assistance available from FSA

Farmers looking for financial assistance in creating storage facilities are encouraged to contact the local Farm Services Agency (FSA) office for loan applications. Farm Services Agency County Executive Director, Bobby Schmidt, reminds McCulloch County farmers of Farm Storage Facility Loans (FSFL) available through the FSA. ‘At a time when commercial storage facilities are at maximum capacity and charging premium rates nationwide, on-farm storage provides producers with an attractive alternative,’ said Schmidt. The Farm Service Agency is offering seven-year, low-cost loans to grain producers desiring to build new or upgrade existing storage facilities and related essential, permanently affixed drying or handling equipment. According to Schmidt, eligible 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, quality improvement equipment, electrical equipment and concrete components considered essential for a fully functional storage facility; remodeling existing storage facilities to increase storage capacity. 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 opportunity to get the best price for their crop,’ said Schmidt. 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 real estate provisions apply for loans 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 downpayment 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 May 2001, the annual interest rate is five percent. ‘Although we are in the early stages of 2001 crops, advance planning for storage will mean one less decision to be made at harvest, allowing time to develop progressive, potentially lucrative marketing strategies,’ said Schmidt.

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