This blog began through a NIFA grant for Missouri Beginning Farmers. It continues today as a way for beginning farmers to learn about new ideas and to hear about upcoming events of interest. It is maintained by Debi Kelly (firstname.lastname@example.org).
As an Extension Associate with the University of Missouri, I work with beginning farmers, small farms, alternative agriculture and organic farming. I am also the Co-coordinator for the Missouri Sustainable Agriculture and Research (SARE) Education Professional Development Program (PDP).
The U.S. Department of
Agriculture (USDA) Farm Service Agency (FSA) Farm Storage Facility Loan Program
(FSFL) provides low-interest financing for producers to build or upgrade farm
storage and handling facilities. The FSA is authorized to implement the program
through USDA's Commodity Credit Corporation (CCC).
Eligible Facility Loan
commodities are eligible for farm storage facility loans:
·Corn, grain sorghum,
rice, soybeans, oats, peanuts, wheat, barley or minor oilseeds harvested as
·Corn, grain sorghum,
wheat, oats or barley harvested as other-than-whole grain
·Pulse crops - lentils,
chickpeas and dry peas
·Fruits (includes nuts)
and vegetables - cold storage facilities
Eligible Facilities and Upgrades
An FSA farm storage
facility loan must be approved by the local FSA county committee before any
site preparation and/or construction can be started.
The following types of
facilities and upgrades are eligible for farm storage facility loans:
·New conventional cribs
or bins designed and engineered for whole grain storage having a useful life of
at least 15 years.
structures and remanufactured oxygen-limiting structures built to original
manufacturer's specifications and other upright silo-type structures designed
for whole grain wet storage having a useful life of at least 15 years.
·New flat-type storage
structures, with permanent floors and bulkheads, designed for and primarily
used to store whole grain for the loan term.
·New electrical equipment
integral to the proper operation of the grain storage and handling equipment,
excluding the installation of electrical service to the electrical meter.
·New safety equipment, as
required by CCC and meeting the U.S. Department of Labor's Occupational Safety
and Health Administration (OSHA) requirements, such as interior and exterior
ladders and lighting.
·New equipment to
improve, maintain or monitor the quality of stored grain, such as cleaners,
moisture testers and heat detectors installed in conjunction with a proposed
foundations, aprons, pits, and pads, including site preparation, labor and
material, essential to the proper operation of the grain storage and handling
·Renovation of existing
farm storage facilities, under certain circumstances, if the renovation is for
maintaining or replacing items that have a useful life of at least 15 years.
·New permanently affixed
grain handling and grain drying equipment determined by CCC to be needed and
essential to the proper operation of a grain storage system (with or without a
loan for the storage facility).
·New structures that are
bunker-type, horizontal or open silo structures, with at least 2 concrete walls
and a concrete floor, designed for whole grain storage or
other-than-whole-grain storage and having a useful life of at least 15 years.
·New structures suitable
for storing hay built according to acceptable design guidelines and having a
useful life of at least 15 years.
·New structures suitable
for storing renewable biomass built according to acceptable industry guidelines
and having a useful life of at least 15 years.
·New cold storage
buildings, including prefabricated buildings, having a useful life of at least
15 years that are suitable for storing fruits and vegetables. Also may include
permanently affixed cooling, circulating, and monitoring equipment and electrical
equipment including labor and materials for installation of lights, motors and
wiring integral to the proper operation of a cold storage facility.
equipment, used bins, and used equipment are not eligible for financing.
·Facilities built for
commercial purposes and not for the sole use of the borrower(s) are not
eligible for financing.
Eligible Cost Items
The net cost for
building or upgrading farm storage and handling facilities and equipment may
include the following:
·Purchase price and sales
·Shipping and delivery
·Site preparation costs
·New material and labor
for concrete pads, electrical wiring, and electric motors
·Off-farm paid labor
·New on-farm material
approved by FSA
archaeological study fees
An eligible borrower is
any person who is a landowner, landlord, leaseholder, tenant or sharecropper
·Produces an eligible
facility loan commodity
·Has a satisfactory
credit rating as determined by CCC
·Demonstrates the ability
to repay the debt for the facility loan
·Possesses no delinquent
non-tax federal debt
·Demonstrates a storage
need based on the borrower's three-year-average acreage and share of
production, minus any current storage available
·Provides proof of
multi-peril crop insurance from the Federal Crop Insurance Corporation (FCIC)
or a private company for the life of the loan
·Provides proof of all
peril insurance and, if applicable, flood insurance with CCC as a loss payee
with USDA provisions for highly erodible land and wetlands
with the National Environmental Policy Act
with any applicable local zoning, land use, and building codes
·Has not been convicted
of a controlled substance violation
The following are
security requirements for farm storage facility loans:
·All loans must be
secured by a promissory note, security agreement and a UCC-1 describing the
storage facility and accompanying equipment; and
from all lien holders on the real estate where the facility will be located or
from owners of real estate when the loan applicant is not the landowner, except
when CCC holds the first lien on the real estate. Severance agreements will not
be required if the borrower increases the down payment from 15 percent to 20
For loans that exceed
$100,000 or the borrower's aggregate outstanding loan balance exceeds $100,000,
the borrower must be able to provide at least one of the following:
·A first lien on the real
estate on which the facility is located;
·Real estate owned by the
borrower other than where the facility is located, provided the real estate
offered is sufficient to secure the loan; or
·A letter of credit from
a financial institution in an amount sufficient to protect CCC's interest for
each year the loan has an outstanding balance.
Maximum Loan Amount
The maximum loan amount
through the Farm Storage Facility Loan Program is $500,000 per loan.
Facility Loan Terms
The following are the
terms for farm storage facility loans:
·A 15 percent cash down
payment is required; thus, CCC's loan is limited to 85 percent of the net cost
of the eligible storage facility and permanent drying and handling equipment
(subject to the applicant's storage needs test). The down payment cannot include
any trade-in, discount, rebate, deferred payment or post-dated check.
·Loan terms available are
seven (7) years, ten (10) years or twelve (12) years depending on the amount of
·Interest rate is fixed
for the loan term based on the rate in effect during the month the loan is
initially approved. The interest rate is equivalent to the rate of interest
charged on Treasury Securities of comparable term and maturity.
·Loans are to be repaid
in equal amortized installments.
·Loan will not be
disbursed until the facility has been erected and inspected with the exception
of one (1) qualifying partial disbursement.
Cost of Obtaining a Loan
·Each applicant will be
charged a nonrefundable $100 application fee.
·CCC will pay all
collateral lien searches and recording fees for filing Form UCC-1 and credit
·Applicants pay all other
fees, such as severance agreements, attorney fees, real estate lien search
fees, and instrument filing fees.
·For loans over $100,000,
applicants will be required to pay the cost of obtaining a title search/opinion
or title insurance.
Persons Required to Sign
The following persons
are required to sign the loan agreement:
·For sole proprietorships
and joint ventures, all individuals, including spouses, if applicable
partnerships, any member unless the Articles of Partnership are more
·For corporations and
limited partnerships, an individual with signature authority on file with FSA
Where to File the
Loan applications should
be filed in the administrative FSA Office that maintains the farm's records.
For more information
about FSA programs, contact your local FSA office or USDA Service Center, or
online at http://www.fsa.usda.gov.