Small farmers can apply for startup loans of up to $35,000 under a federal program launched Tuesday.
The "microloan" recipients could include beginning farmers, minorities, recent military veterans and growers who serve the local food movement, Agriculture Secretary Tom Vilsack said.
The program aims to help the farmers grow to the point where they can get conventional loans from banks or the U.S. Department of Agriculture.
"I have met several small and beginning farmers, returning veterans and disadvantaged producers interested in careers in farming who too often must rely on credit cards or personal loans with high interest rates to finance their start-up operations," Vilsack said in a news release.
The money can be used for expenses such as land rent, seed, fertilizer, irrigation, tools, utilities and marketing. The current interest rate is 1.25 percent. The repayment term is up to seven years.
Among the goals is increasing food supplies for farmers markets, ethnic markets and community-supported agriculture, where subscribers pay a nearby grower for produce deliveries.
Vilsack noted that direct-to-consumer sales are a fast-growing sector, with a 60 percent increase in farmers markets in the past three years.
"It's about making sure that we have diversity within agriculture, that we have a good blend of large production facilities, medium-sized operations and smaller operations," Vilsack told The Associated Press.
Kay Jensen, an organic farmer who raises broccoli, strawberries and tomatoes in Sun Prairie, Wis., said she might consider a microloan for $3,000 to $10,000 to expand her irrigation systems.
"A lot of times, what we need is just small amounts of money, but a lot of times, the only funding available is large amounts of money," she said. "This whole concept of a microloan, where you're looking at smaller, reasonable amounts of money, this really fits an incredible niche."
AT A GLANCE
More information on the new loan program is at www.fsa.usda.gov or Farm Service Agency offices:
Stanislaus and Tuolumne counties: 3800 Cornucopia Way, Suite E, off Crows Landing Road, Modesto, (209) 491-9320
Merced and Mariposa counties: 2926 G St., Suite 102, Merced, (209) 722-4119
San Joaquin and Calaveras counties: 3422 W. Hammer Lane, Suite A, Stockton, (209) 472-7127