More money needed for farmer loan program

When a $35 million bonding package to fund low-interest loans for farmers became law last year, officials believed that money would be enough to last for three years.

But the Rural Finance Authority’s loan program has proven so popular that less than $8 million remains to be loaned and Department of Agriculture officials expect those funds could be gone as soon as April.

The House Agriculture Finance Committee heard two bills Tuesday that would authorize another $35 million in bonding proceeds for the RFA.

Sponsored by Rep. Tim Miller (R-Prinsburg), HF2882, as amended, would appropriate $35 million for the loans. The companion bill, SF2551, is sponsored by Sen. Andrew Lang (R-Olivia) and awaits action by the Senate Capital Investment Committee.

The other bill, HF3050, is sponsored by Rep. Mike Sundin (DFL-Esko) and would also appropriate $35 million for the loan program. It currently has no Senate companion.

Both bills were laid over by the committee, and there was general agreement among members about the need for more money. But Rep. Rod Hamilton (R-Mountain Lake), the committee chair, asked representatives from the Department of Agriculture, which administers the RFA program, to report back exactly how much money is needed now.

The department had recommended $20 million in funding last fall, but sluggish commodity prices and rising interest rates have driven the need for RFA loans - 121 have now been made from the 2017 bonding package - and $7.5 million currently remains unencumbered.

“What I’ve gathered is that everybody is onboard with the program,” Hamilton said, adding that the committee would “hold” the bill until it learned more, then make a recommendation on the final amount to the House Capital Investment Committee, which develops the omnibus bonding bill.

Sundin said his bill would keep the committee’s “options open” in case problems arise with the omnibus bonding package.

“This is a good investment for Minnesota farmers,” Sundin said.