On November 4, 2009, Texas Agriculture Commissioner Todd Staples announced a new program that will assist young farmers who wish to expand or create an agricultural operation in Texas. In a press release, Staples explained how the program will benefit young farmers,ranchers and agricultural related operators.
The 81st Texas Legislature authorized the Texas Agricultural Finance Authority (TAFA) to establish the Young Farmer Grant Program.
Staples also worked with legislators during the 81st session to make significant improvements to other programs within TAFA.
TAFA provides financial assistance to creditworthy businesses and individuals through partnerships with agricultural lending institutions and banks.
According to the 2007 Census of Agriculture, only six percent of the state’s farm operators are under the age of 35. These statistics raise many questions as to who will replace the current food and fiber producers when they retire.
Nancy Cordero, Texas Department of Agriculture rural economic development representative, said it is important to encourage young farmers to take over family operations because they play a critical role in supplying our nation with food and fiber.
“As the nation’s leader in cattle, cotton and many other products that all Americans depend on, Texas needs to secure the future of its agriculture industry,” Cordero said. “The Young Farmer Grant Program is a great step in that direction.”
Also, with many ranchers and farmers being challenged with economic uncertainties, tight credit, and drought, implementation of this program arrives at a crucial time.
Four new financing tools including grants, interest rate reductions and loan guarantees will be available to assist young farmers.
The young farmer grant, an agricultural loan guarantee, an interest rate reduction, and a young farmer interest rate reduction, are available for eligible applicants.
The Young Farmer Grant, for the first time, will allow the TAFA to offer a grant program that encourages individuals who are at least 18 and younger than 46 to expand an existing or start their own agricultural business in Texas. Applicants must be able to match expenditures dollar for dollar to sustain, create or expand a proposed project. Individual grants may range from $5,000 to $10,000.
The Agricultural Loan Guarantee will allow the TAFA to provide financial assistance through loan guarantees to applicants who wish to establish or enhance their farm or ranch operation or establish an agriculture-related business. The program provides guarantees based on a tiered structure not to exceed $750,000 or 70 percent of the loan amount, whichever is less. The program also will provide an interest rebate to eligible borrowers as part of the process.
The Interest Rate Reduction program will allow TAFA to facilitate commercial lending that may result in below-market interest rates. Anyone who wishes to use the proceeds from this program in order to promote the creation and expansion of an agriculture business in Texas could be eligible for this program.
The Young Farmer Interest Rate Reduction tool will be available to those who are between 18 and 46 years of age. The proceeds must be used to help foster the creation and expansion of an agricultural business in Texas. This program will be more beneficial than the standard interest rate reduction program and will offer young farmers a greater interest rate reduction through TAFA.
The TAFA will set up two periods in each fiscal year (early winter and summer) in order to receive and approve grant applications for the entire program.
For more information about the Young Farmer Grant and other TAFA programs, visitwww.texasagriculture.gov.