Applications for Disaster Assistance Loans in NC Scarce
USDA Disaster declarations for the state of North Carolina have been numerous the past few months, starting with the tornados in April, and ending with the drought, just a few weeks ago, with Hurricane Irene in between. While emergency loans are available to farmers Mike Husky, Farm Service Agency, NC State office says:
“We’re finding that some cases the farmer has such a debt load that they don’t want to incur additional debt, or the loss is such than an additional loan might not work out feasibly in their operation. So, a lot of the inquiries that we get seem to indicate that they’re looking for grant opportunities as opposed to loan opportunities.”
Husky explains further that while inquiries have been high the actual number of federal loans made to NC producers is very small:
“Well, our offices in the affected areas have seen quite a few phone inquiries and farmers coming in to talk about the assistance that’s available, but as far as the actually number of loans….actually from October 1 of 2011, through February 10th, we just made a total of 12 loans, so far this fiscal year in an amount…well, close to a million dollars, $942,000.”
Each loan has a maximum of half a million dollars, depending on the purpose.
Husky says that while the federal government has been known to make a grant or two, it’s not the same as a loan, which of course, has to be repaid:
“Our option that’s available, at least through the Farm Loan Division, is this emergency loan that we’ve been talking about.”
So, with cheap, 3.75% interest, money available, why aren’t farmers taking advantage of this option? Husky speculates:
“I would think…of course we try to publicize through the news media the availability of our program, I don’t know if everyone is hearing that may have an interest, I suppose that could be a stumbling block that they may just not have yet heard about it. But, again, a good portion of our inquiries, whether it people coming into the office or phone inquiries when we talk about the fact that our program is a loan, the sort of move on to where can they find grant-type monies.”
Also, to qualify for a USDA disaster loan, in most cases a producer must have at least one rejection from a private or land bank institution to qualify.
As Husky explains, the government has no desire to compete with private industry.