The Times West Virginian

Business

June 22, 2014

White Hall Farm Service Agency provides assistance to farmers

FAIRMONT — The White Hall Farm Service Agency exists to help farmers get into business and stay in business.

The Farm Service Agency is under the U.S Department of Agriculture and has offices in each state. It offers low-interest loans to lower-income people who can’t get funding elsewhere because they have slow or questionable credit or don’t have enough funds to make a downpayment.

The agency wants to assist farmers so they can produce the products that allow the American people to have food on their tables, said Karen McBee, farm loan manager for the White Hall office.

“The American people have to have food to eat,” she said. “Somebody has to help them get that. Farmers don’t make a lot of income.”

The office in White Hall serves Marion, Monongalia, Taylor and Preston counties. McBee also manages another Farm Service Agency location in McMechen, which covers Wetzel, Tyler, Marshall, Ohio, Brooke and Hancock counties.

Last week, she traveled to Preston County to close on a loan for a veteran who was changing his farm operations.

As reported at the end of April, the White Hall office had 121 borrowers with a volume of $5.6 million in loans. Overall, for the 10 offices in the state, there were 1,168 loans valued at $74.6 million.

McBee said banks are often hesitant to help someone who has just starting farming. However, the Farm Service Agency is willing to do whatever it can to help the farmer, and the government subsidizes the loans.

“We’ll actually go out to the farms and take the applications there,” she said. “We answer questions from them. We refer to ourselves as the ‘lender of first opportunity.’”

The agency also takes financial statements from the farmers and looks at their income to see how they’re progressing.

McBee explained that farmers can use the Farm Service Agency loans to buy startup equipment or replace old equipment, such as tractors; purchase livestock, like cows, sheep, goats and pigs; or cover other operating expenses, from fencing to feed and seed.

Besides these operating loans, the agency also has a program that finances farm purchases, she said. A person must have a certain number of years experience in farming before they can obtain one of these farm ownership loans.

“The farms do have to be able to sustain a farm product for an extended period of time, and the people have to be qualified to manage that farm,” McBee said.

The farm-purchase loans can have up to 40-year terms, or can be less depending on the farmer’s income, and feature an interest rate

of 4 percent. The operating loans — at 2.25 percent interest — span from one year for straight operating expenses, like feed, to seven years for equipment, she said.

Also, the Farm Service Agency has a guaranteed program in which it works with other lenders. The lender makes the farm or equipment loan to their customer — the borrower — and the agency can offer a guarantee of up to 90 percent to the bank in the case of a loss of principal and interest. The bank determines the interest rates and terms for these particular loans, McBee said.

She commented that in today’s world, individuals don’t seem to have enough money to pay 25 percent or so out of pocket on a loan. But if the agency works with a client on a direct loan or a guaranteed loan, that downpayment can be waived.

In addition, the Farm Service Agency dedicates some funding specifically for socially disadvantaged and beginning farmers. The loan program finances 50 percent of the loan, another lender finances 45 percent, and the farmer covers the remaining 5 percent.

Last but not least, the Farm Service Agency offers a loan program that awards up to $5,000 for youth to get started in farming with an Future Farmers of America or 4-H advisor foreseeing their project.

The agency has a whole other side, too, that focuses on emergency assistance for farmers who experience livestock or grazing losses and includes a program for natural resource conservation.

For more information, call the White Hall Farm Service Agency at 304-363-8861 or visit www.fsa.usda.gov.

Email Jessica Borders at jborders@timeswv.com or follow her on Twitter @JBordersTWV.

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