(Host) The Douglas administration and the Legislature plan to use federal stimulus money to provide low interest loans for struggling farmers.
Officials say the new loan program is not a long-term fix. But they say the money should help farmers facing record low milk prices.
VPR’s John Dillon reports:
(Dillon) The huge stimulus bill passed by Congress didn’t include any direct help for dairy farmers. So lawmakers and the Douglas administration want to use $1 million in discretionary money to buy down interest rates on loans for farmers.
The money will allow the state to make $6 million in new loans for farmers to buy seed, feed and fertilizer this spring.
Jo Bradley is director of the Vermont Economic Development Authority, which will administer the loan program.
(Bradley) "It’s a really important effort. My lenders are out on the farm every day and they see this. They sit at kitchen tables and they sit with farmers that just aren’t making it – they aren’t able to get the price for their milk that it costs them to make their milk. So this will be a great step and will allow us to continue to help farmers.”
(Dillon) Chris Nonemacher is a dairy farmer in South Randolph. He says he’s now getting paid about $11 for 100 pounds of milk — about half of what he got a year ago. Nonemacher said the break even price is about $17 a hundredweight.
(Nonemacher) "I think that every bit of help is a good thing. This may not be as big as some people may think that it should be possible. But anything will help at this point, that’s for sure."
(Dillon) The loans will carry a 2 percent interest rate, and farmers can use the program to buy feed, seed and fertilizer. Or they can consolidate existing loans and reduce borrowing costs.
Governor Jim Douglas says the program does not solve the structural problems facing the dairy industry. He says Congress has to fix the milk pricing system.
(Douglas) "But for the short term, we have to do what we can to help farmers when the price of milk is so low. And I think this program is going to do exactly that."
(Dillon) Officials say the loan program starts immediately.
For VPR News, I’m John Dillon in Montpelier.