abstract:
...The USDA does offer operating loans, but they're geared for growers looking for bigger loans. 'Because the Farm Service Agency requires the same amount of paperwork for a $100,000 loan and a $5,000 loan,' says Santos, 'they shy away from making a small loan -- unless it's a youth loan.' Additionally, the managerial requirements for USDA operating loans overlook the entrepreneurial young person. Current rules require that operating loan applicants have a four-year degree in an agricultural field, some combination of vocational training, and on-farm experience, or farm ownership or management experience for an entire production cycle.
Frustrated at the lack of credit opportunities for small and beginning farmers, Santos is now organizing the Tip of Texas Farmers Co-op. 'Tip-o-Tex' will offer access to a multi-farm CSA and small loans to its producers like Padilla. The initiative received initial funding through the Rio Grande Valley Empowerment Zone and will operate as a nonprofit organization and for-profit business. The co-op will operate as a typical for-profit business and the nonprofit side will offer producers loans, marketing, and start-up assistance.
Non-governmental organizations, like the one that Santos is forming, have been picking up the slack on existing federal credit programs for some time.
A USDA video tells the story of the Hungate boys of Idaho, ages 9, 11, and 12, who were given a $5,000 loan to buy four cows. Drake, the eldest Hungate, reports, "we got really good interest -- and we locked it in at 3.2 percent."
...The USDA does offer operating loans, but they're geared for growers looking for bigger loans. 'Because the Farm Service Agency requires the same amount of paperwork for a $100,000 loan and a $5,000 loan,' says Santos, 'they shy away from making a small loan -- unless it's a youth loan.' Additionally, the managerial requirements for USDA operating loans overlook the entrepreneurial young person. Current rules require that operating loan applicants have a four-year degree in an agricultural field, some combination of vocational training, and on-farm experience, or farm ownership or management experience for an entire production cycle.
Frustrated at the lack of credit opportunities for small and beginning farmers, Santos is now organizing the Tip of Texas Farmers Co-op. 'Tip-o-Tex' will offer access to a multi-farm CSA and small loans to its producers like Padilla. The initiative received initial funding through the Rio Grande Valley Empowerment Zone and will operate as a nonprofit organization and for-profit business. The co-op will operate as a typical for-profit business and the nonprofit side will offer producers loans, marketing, and start-up assistance.
Non-governmental organizations, like the one that Santos is forming, have been picking up the slack on existing federal credit programs for some time.
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A USDA video tells the story of the Hungate boys of Idaho, ages 9, 11, and 12, who were given a $5,000 loan to buy four cows. Drake, the eldest Hungate, reports, "we got really good interest -- and we locked it in at 3.2 percent."
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