Agricultural Loans Key Terms

Learn more about the types of agricultural loans available
By Terri Deno Agricultural loans are the backbone of the industry. Many first-time farmers rely on these loans in order to get a farm started. Many experienced farmers also use agricultural loans to replace equipment, expand their operations or get quick financing when disaster strikes. Agricultural loans work just like any other loan in that the farmer must have good credit, collateral and the ability to make monthly payments on the loan in order to qualify.

Subsidies

A subsidy in agriculture is money paid to farmers from the government in order to manage commodities and supplement income in order to affect the supply and costs of the specific commodity.
Try:  The Center for Agricultural and Rural Development out of Iowa State University offers information on farm subsidies and how they are concentrated in the United States. You need to access the PDF copy of the Iowa Ag Review to see the charts referred to in the article.

Direct ownership loans

A direct ownership loan is a loan issued by the Farm Service Agency (FSA) that provides loans to farmers that are not able to qualify for a loan from any other type of financial institution because of an economic hardship or disaster.
Try:  Government Loans offers detailed information on eligibility and requirements for agricultural direct ownership loans.

Operating expenses

Operating expenses are the continual costs that are paid out in order to keep a farm or ranch in operation, Operating expenses need to be determined before farmers apply for a loan so they know how much money is needed.
Try:  Agriculture Online offers advice and news articles on operating expenses for different types of ranches and farms in the U.S.

United States Department of Agriculture (USDA)

The USDA is a government agency that works to assist and protect farmers. The USDA also has the job of providing quality food products to consumers by grading food and offering food safety information.
Try:  The United States Department of Agriculture offers a variety of agricultural loan options for farmers looking to start a farm, get emergency assistance or other specialized needs.

National Council of State Agricultural Finance Programs (NCOSAFP)

The National Council of State Agricultural Finance Programs is an organization that provides farmers with the information they need to choose the right type of state loan for their farm needs as well as knowing what types of loans each state offers.
Try:  The National Council of State Agricultural Finance Programs offers an overview of the types of agricultural loans available to farmers in specific states.

Emergency farm loans

Emergency farm loans are available for farmers that meet specific requirements of need. These requirements can include land that is part of a declared disaster area or a farm that has had a loss of 30 percent or more of its total crop, livestock or real estate.
Try:  Gov Benefits offers an outline of what an emergency farm loan can provide and how a farmer can qualify to get one of these loans.