How Minnesota keeps
BY CURT HAULER fortunate enough to be bom
ST. PAUL, Mmn. In into or marry into
Minnesota not every future agriculture,
fanner is bom rich enough The situation is much the
to buy his own farm. And same in Pennsylvania, of
every potential farmer is not course.
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PENNSYLVANIA
A.F.M. EQUIPMENT CO.
Plamsville, Pa Luzerne Co
717-824-7918
_ _ . LAWN CARE OF. PA.
BLUE MOUNTAIN ENTERPRIZE Martmdale, Pa, Lancaster, Co.
Jonestown, Pa , Lebanon Co 215-445-4541
717-865-2994
CHARLIE’S S4I ESA service JOHN McCLURE JR. STOLTZFUS FARM SERVICE
!rn Warriors Mark. Pa , Cochranville Pa. Chester. Co
Br ° C 0 Huntingdon Co 215-593-2407
Bl4-632-5955
JIMS LAWN MOWER SERVICE
Harrisburg, Pa. Dauphin Co
717-545-5114
ver
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KOCHS NURSERY A
EQUIPMENT CO.
Sinking Spring, Pa , Berks Co
215-777-2021
NEIMAN EQUIPMENT
Dover Pa .York Co
71^-29^-2101
Guaranteed credit
But Minnesota farmers
have the advantage of a
Farm Security Program.
According to Minnesota
Agriculture Commissioner
Mark Seetm, the program
was created to assist far
mers who otherwise would
be unable to obtain credit to
purchase farm real estate.
It seems to be working
well. Minnesota stands out
as one state with no
measurable loss of farmland
m the past decade.
The state guarantees loans
and defers interest
payments for farms.
The program provides a 90
percent guaranty on loans
made through any lender or
on a contract for deed and
may provide a four percent
interest adjustment
payment on the outstanding
principal balance of the loan.
The program got un
derway in 1976 when the
Minnesota legislature
enacted its Family Farm
Security Act to be ad
ministered by its Com
missioner of Agriculture.
According to Bob Swanson
of the Minnesota Ag
Department, there are 10
eligibility requirements.
First, the applicant must
live in Minnesota after the
loan is granted. There is no
residency requirement, so
an out-of-state farmer could
move mto Minnesota to take
advantage of the program.
The applicant must posess
the ability to manage a
farm. And the person must
agree to participate in a
farm management program.
That requirement assures
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ROGLEN EQUIPMENT THOMAS POWER EQUIPMENT
Elverson, Pa , Chester. Co Avondale. Pa , Chester Co
215-286-9648 215-268-2181
STAUBS MOWER SERVICE
Arentsville, Pa.. Adams, Co KEENER * SENSENIG CO.
717-677-8444 Wilmington, Del
302-655-2790
DEALER INQUIRIES INVITED
LAWN CARE DISTRIBUTORS
PHONE; 215-445-4541
formers Lancaster Farming, Saturday, February 9,1980—C43
or
her farms producing
the state that the farm will
be managed with up-to-date
methods and the owner will
not slack off on management
responsibilities.
The applicant, spouse, and
dependents must have a net
worth of less than $75,000.
The applicant must
demonstrate the need for a
guaranteed loan by detailing
possible family financial
assistance or the possibility
of a non-guaranteed loan
from any lender.
The state also requires
financial statements for the
past two years. And the
applicant must prepare a
cash flow to show the ability
to repay the proposed farm
loan.
In addition to being credit
worthy to that degree, the
applicant must have
machinery and equipment
available plus operating
capital or a line of credit to
operate the proposed farm.
The important word in that
requirement is “available.”
Farming must be the
principal occupation of the
applicant.
Any person who meets all
of the requirements may be
eligible for a Minnesota
Farm Security loan
guaranty.
The program is designed
to help the fanner who has a
tangible record of farming
experience. The experience
would support future cash
flow projections to minimize
risk to both the lender and
the state.
The established ap
plicant’s position may
outweigh educational and
ELAWARE
CROMPTON BROS.
St. George, Del
302-834-4602
other off-the-farm job ex
periences.
The applicant currently
renting land or managing an
efficient livestock operation
also has a step up.
There is no age, acre, or
dollar limit for applications.
According to a statement
by Commissioner Seetm last
Wednesday, increasing legal
and financial complexities
have slowed Minnesota’s
program.
Only one farm loan was
approved in January
money to a Sibley County
couple for the purchase of a
160 acre dairy farm near
Gibbon.
That loan brought to 187
the total number of new
farm owners established
under the program,
The overall loan volume
guaranteed, according to
Seetm, now exceeds $31.3
million on 30,049 acres of
Minnesota farm land.
Although the general tone
of the economy, inflated land
and high farm production
costs have increaded
problems for buyers, sellers,
and lenders, there still are
plenty of applicants.
Program Administrator
Wayne Marzolf said his
Farm Security office has 21
applications in process but
several of those need more
information, including
written partnership
agreements on labor,
machinery, managment,
and financial obligations.
There have been misun
derstandings m the past
year, especially in the area
of partnerships.
No longer will the state
accept verbal partnership
agreements in loan ap
plications. The purpose is to
minimize misun
derstandings and problems
that may be experienced
later due to changing
weathei, market disrup
tions, national policy, and
other un-anticipated cir
cumstances.
The law, while it allows
operation of a farm as a
partnership, requires in
dividual ownership of the
land.
TVi(> popartTT)PHt em
phasizes the program only
provides a guarantee; the
applicant must find his own
source of funds R’ ,+ Hint job
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Contact the Na-Churs Dealer
in your area:
EASTERN PA. CENTRAL PA. WESTERN PA,
JOE SEQUINE ROY LARRY REAM
(215)536-2796 SHERT2ER (814)395-5030
(717)872-7342
CENTRAL PA. MARYLAND
PHARES AUKER HENRY OWENS
(717)367-2667 (301)848-9224
is made easier with a
guarantee.
Minnesota pays four
percent of the interest on
behalf of the applicant
Payment is made to any
lender on the outstanding
balance of the loan,
regardless of the actual rate
of interest agreed upon.
Two provisions include:
the loan must be completely
amortized m 20 years or less
without a balloon payment;
or the loan must be amor
tized for 20 years with a
balloon payment in 10 years
or less.
The applicant becomes
ineligible for the payment
adjustment if his net worth
exceeds $135,000.
The guaranty to the lender
is not affected in any manner
by the payment adjustment.
The loan applicant must
repay the total amount paid
by Minnesota in payment
adjustments. The funds
become due at the maturity
of the loan.
But there is no interest
charge on the money the
state advanced.
The decision on who is
granted a loan and who is
denied one is made by the
Family Farm Security
Advisory Council.
This Council is made up of
seven members: two
bankers, four farmers, and
one vocational agriculture
coordinator.
The Council has to advise
the Department regarding
the Program, review all
applications, and make
recommendations con
cerning loans.
The Council meets mon
thly to review all ap
plications.
In addition to its fine
background in saving
Minnesota farmland, the
program has been endorsed
by several states which have
adopted the Minnesota
program as a model for laws
in their own states.
Most of the states with
similar programs at present
are in the West.
*«•
Spending on farm inputs
will rise 11 percent in 1900,
after a 16 percent increase in
1979, predict U.S. Depart
ment of Agriculture
economists.