Farmers ponder taking low-interest emergency loans

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(Host) In June, the federal government declared all of Vermont a disaster area because of heavy rains.

That means farmers who lost crops are eligible for low interest emergency loans through the USDA.

Vermont’s dairy farmers have been hardest hit by the weather.

Now that the season is ending, they’re facing a difficult decision: whether to borrow money to buy additional feed, or find other ways to pay for it.

VPR’s Steve Zind reports.

(Zind) Most of the hay and alfalfa is in, and the last of the corn is being cut. For Vermont’s dairy farmers these are days of reckoning when it becomes clear whether or not there’s enough feed to carry them through the winter.

Patrick Freeman is Farm Loan Chief with the USDA’s Farm Service Agency, which has offices in Middlebury, St. Albans, Newport and White River Junction.

The agency administers the low-interest emergency loans available for farmers who’ve lost 30 percent or more of a crop.

Freeman says the question right now is how many dairy farmers will take advantage of those loans to buy the extra feed they’ll need this winter.

(Freeman) “I believe there’s going to be demand, but it’s also a very complicated situation, with milk prices being as low as they are, borrowing money is a tough situation.

(Zind) Freeman says the vast majority of Vermont’s dairy farmers lost crops because of this summer’s weather.

The loan money is available at 3.75 percent interest. In addition to buying feed, it can also be used to refinance other higher interest rate loans.

Jackie Folsom is president of the Vermont Farm Bureau.

Folsom says some dairy farmers my use the emergency loans for refinancing, but Folsom says many will try to come up with the money for feed by cutting costs.

Folsom says that’s what she and her husband are doing on their dairy farm.

(Folsom) “We’ve started cutting back on expenses. We don’t have a hired hand anymore, which means we don’t have the workers comp expense. That means a lot more stress on my husband who’s the lone guy on the farm now.”

(Zind) Folsom says forage crops on her farm are down more than 50 percent this year. She says other farmers she’s talked to are also finding ways to pay feed bills without adding to their debt.

(Folsom) “There will be people that will be looking for part-time jobs. I was just talking to a couple the other night who have both gone off the farm to find part-time jobs and the father-in-law is now milking the cows so that they can keep the farm going. So they will be looking at all sorts of ways, whether they’re the larger farms or the smaller farmers to cut expenses yet again and try to keep going.”

(Zind) Dairy farmers are also getting some help from the state, which is paying out $8.6 million in monthly installments. The amount of the checks varies each month, based on milk prices. The money is expected to last until early next year.

Folsom says no one expects the state to be able to continue the program.

For Vermont Public Radio, I’m Steve Zind.

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