USDA program offers loans to farmers for biomass storage
The USDA Farm Service Agency recently announced the expansion of its Farm Storage and Facility Loan program, which provides low-interest financing to producers. The announcement is part of a broader effort to help small and mid-sized farmers and ranchers announced by Agriculture Secretary Tom Vilsack on March 10.
With regard to bioenergy, the loan program can provide low-interest funds to build or upgrade permanent facilities to store eligible commodities, including renewable biomass. According to a USDA spokeswoman, renewable biomass is defined as any organic matter that is available on a renewable or recurring basis used for the production of energy in the form of heat, electricity, and liquid, solid or gaseous fuels for the purposes of the FSFL program. Under this definition, renewable biomass can include algae, crop residues, plants and trees (excluding old growth timber), feed grains, other agricultural commodities, and vegetative waste material.
The USDA also noted that FSFL security requirements have been eased for all types of loans between $50,000 and $100,000. Previously, all loans in excess of $50,000 required a promissory note and additional security, such as a lien on real estate. Now loans up to $100,000 can be secured by only a promissory note. Additional changes to the FSFL program will allow FSA State Committees to subordinate Commodity Credit Corp.’s lien position.
Additional information on the program can be accessed on the USDA website.