There are many types of rural farm loans offered by the USDA or United States Department of Agriculture’s Farm Service Agency. Farmers who do not fulfill the eligibility criteria of availing rural farm loans in the conventional manner may also apply for the same.
Farmers having met with financial blows due to natural calamities are also entitled to avail of the loan.The rural farm loans are usually given to individuals who have just started afresh as farmers. There are farmers who do not have sufficient resources to carry out their daily farming activities and as such are left with no choice but to avail of the rural farm loans.
Rural farm loans are used for various purposes like buying seed, land, feed, equipments, supplies and livestock. These loans may also be used for the purpose of constructing buildings or making improvements in the farm.
The FSA or the Farm Service Agency provides operating loans as well as guaranteed and direct farm ownership to ranchers as well as farming households, not able to avail of rural farm loans from Farm Credit System Institutions and commercial banks.
Types of Rural Farm Loans:
Rural farm loans may be of the following types:
- Socially Disadvantaged Farmers And Ranchers Loans:
A farmer or a rancher who is Socially Disadvantaged (SDA), avails of the loans for operating as well as buying ranches and farms of family size. FO or Direct Farm Ownership Loans as well as OL or Farm Operating Loans are extended to the qualified applicants.
- Guaranteed Farm Loans:
Guaranteed farm loans offered by the FSA or the Farm Service Agency offer guarantee to the lenders like credit unions, Farm Credit System organizations and banks of as much as 95% for principal as well as interest loss pertaining to a loan. The farmers approach the agricultural creditors, who arrange for the guarantee. Guaranteed farm loans are meant for operating activities as well as Farm Ownership.
- Beginning Farmers And Ranchers Loans:
Guaranteed as well as direct loans are provided by the FSA or the Farm Service Agency to those individuals who have just taken the plunge in the farming sector. Beginners avail of this category of rural farm loans in the event they fail to do so from other sources of commercial credit.
- Emergency Farm Loans:
Loss incurred by the producers due to reasons beyond ones control, are compensated by the FSA as emergency farm loans. Loss may be due to quarantine, flood and other unforeseen incidents.
- Direct Farm Loans:
With the help of Government funds, the direct farm loans are made under the Direct farm loans, the following types of loans may be availed.
- Farm Ownership
- Youth Loans
- Operating Loans
- Emergency Loans
Last Updated on : 30th July 2013