Early each year, the Iowa Agricultural Development Authority, the state agency that administers Iowa's Beginning Farmer Loan Program, looks back at the banks it worked with in the previous year. The IADA evaluates the lenders to see to see how well they supported Iowa's loan program for beginning farmers.
The IADA announced last week that US Bank of Boone in central Iowa, has been named "Beginning Farmer Loan Program Bank of the Year" for 2007. "This award is given annually to the Iowa bank that helps the most beginning farmers and their families get their start with beginning farmer loans," explains Jeff Ward, executive director of IADA.
IADA recently presented a plaque to US Bank Vice President Jayme Ungs. The honor was in recognition of the bank's outstanding work in securing the most loans for beginning farmers in partnership with the IADA's Beginning Farmer Loan Program. "US Bank takes a great deal of pride in participating with the Iowa Agricultural Development Authority in this great program. Providing this service to Iowa families who get their start in farming benefits all of us in the communities we serve," says Ungs.
Loans to buy land, machinery, etc.
The Beginning Farmer Loan Program is a cooperative effort through the farmer, their bank and IADA. Iowa's Beginning Farmer Loan Program is the largest of its kind in the nation. "It was established to provide financial assistance to Iowa's aspiring agricultural producers," says Ward.
There are actually two beginning farmer loan programs administered by IADA that are for use to help beginning farmers buy assets such as land, machinery, breeding livestock or buildings. The Beginning Farmer Loan Program is one, and the other is the Loan Participation Program. "Both the BFLP and the LPP are available to help Iowa farmers purchase ag land, depreciable machinery or equipment, breeding livestock or buildings," says Ward. "These loans may also be used to improve existing buildings or farmland."
In 2007, 113 BFLP loans were closed for a cumulative total of more than $17.8 million. Since the program began in 1981 a total of 3,578 loans have been closed for a total of over $408 million. For the same time period, seven LPP loans were closed, making a total of 93 LPP loans closed since the program was started in 1996, totaling $4,452,020. During 2007, funding limits for the Loan Participation Program were increased, resulting in greater demand for the program.
IADA loan programs in high demand
IADA remained a forerunner in programs benefiting beginning farmers in 2007 with a strong demand for its loan programs.
The Livestock Water Quality Facilities Program, or LWQFP, began in 2005 and it, too, is administered by IADA. "The LWQFP is not necessarily for beginning farmers, it is for all farmers who qualify," says Ward. "The purpose of this loan program is to improve Iowa's water quality by addressing nonpoint source pollution from livestock facilities."
The LWQFP loan program, which is part of the Iowa Water Quality Loan Fund, is operated by IADA in cooperation with the Iowa Department of Natural Resources and the Iowa Finance Authority.
Assistance provided by the LWQFP is limited to animal feeding operation sites with a one time total animal unit capacity of less than 1,000. Funds are available through a linked deposit with the local lender at an interest rate of 3% fixed for the life of the loan. A total of 80 projects have been funded since the program's inception for a total of approximately $5.4 million.
Beginning Farmer Tax Credit program
The Beginning Farmer Tax Credit Program is IADA's newest program, beginning with the 2007 crop year. Under this program, tax credits are issued to an agricultural asset owner who rents their assets to qualified beginning farmers. The tax credit amount is 5% of rental income received for cash contracts and 15% on crop share agreements. Leases must have a length of two to five years. Approximately 290 tax credits were issued for the first year of the program.
"The IADA is pleased to lend a helping hand to beginning and first-time farmers," says Ward. More information about these successful programs is available from the Iowa Ag Development Authority, 505 Fifth Ave., Suite 327, Des Moines, Iowa 50309; or call 515-281-6444. Loan program applications and other pertinent information regarding the IADA is also available at www.iada.state.ia.us.