Iowans Urged to Apply for Soil Conservation Loans

Over 1,000 farmers have applied for low interest loans to install conservation practices.

Iowa Secretary of Agriculture Bill Northey is encouraging farmers to continue to take advantage of the Local Water Protection Program, or LWPP, that offers low interest loans to farmers to help them install conservation practices. Already more than 1,000 farmers have applied to take advantage of the program.

"This program again highlights how seriously farmers take conservation," Northey says. "Through this program farmers take out private loans to finance construction and installation of conservation practices, such as buffer strips, grassed waterways and terraces, to address soil erosion and pollution of our rivers, lakes and streams."

Farmers work with their local Soil and Water Conservation District to design the conservation structures and then through this program receive a low interest loan through their local bank or lender to finance the project. So far 345 lenders across the state have participated in the program.

Farmers praised for efforts

Loans are available for projects from $5,000 to $50,000 and can be made for 100% of the landowner's cost for the project. Terms of the loan are up to 10 years and an interest rate fixed at 3% or lower. Applications are accepted year-round and there is no penalty for prepayment. Local Soil and Water Conservation Districts help farmers design the projects to have maximum impact on saving soil and improving water quality.

To date, 651 farmers have borrowed $9,942,000 since January 2005 to install conservation projects. More than $5 million is pending for 367 additional projects.

These loans are structured as a "Linked Deposit Loan," where by the Iowa Finance Authority works with local lenders to provide assistance for water-quality practices. Through this process the Iowa Finance Authority agrees to accept a 0% rate of return on an investment and the lending institution agrees to provide a loan to eligible borrowers at 3% or less.

Nearly all conservation practices qualify

Virtually all practices eligible for assistance from state and federal conservation programs are eligible under the program. These practices may include but are not limited to: terraces, grade stabilization structures, water & sediment control basins, waste storage structures, pasture and hay land planting, grassed waterways and filter strips, field borders, windbreaks and riparian forest buffers.

Communities and developers can also access the low-interest loans to build or install practices that will help improve the storm water runoff from urban areas.

The Iowa Department of Agriculture's Division of Soil Conservation is responsible for state leadership in the protection and management of soil, water and mineral resources. The soil division assists soil and water conservation districts and private landowners to meet their agricultural and environmental protection needs.

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