USDA financing options for on-farm storage
WASHINGTON – For most farmers, on-farm storage is essential to keeping food fresh and safe prior to marketing.
Whether a grain bin, cold storage for fruits and vegetables, refrigerated milk tank, or meat cooler, all farmers need a temperature-stable environment to safely wash, package, and store products they grow or raise on their farm.
Depending on the size, onfarm storage facilities can be costly to build and install, and not always financially feasible for small and beginning farmers.
The good news is that the U.S. Department of Agriculture offers very low interest loans to farmers to help defray the costs of needed onfarm storage.
SDA’s Farm Storage Facility Loans provide financing for farmers to build or upgrade onfarm cold storage, packing, washing, and handling facilities, including:
- Packing sheds.
- Walk-in coolers.
- Electrical, cooling, monitoring and food safety equipment.
- Graders, sorters, conveyors, washers and drying tunnels.
- Shipping, preparation and installation costs.
Eligibility and terms
Any farmer with onfarm storage needs can apply for a USDA Farm Storage Facility Loan with satisfactory credit, have the ability to demonstrate the ability to repay the loan, and have proof of crop insurance, NAP coverage, or other risk management option.
Loans can be up to $500,000, and require a 15 percent down payment. There is also a $100 nonrefundable application fee.
Loan terms are for 7, 10, or 12 years, and the interest rate is fixed by the U.S. Treasury (currently 2.5 percent).
How to apply
Check out NSAC’s Grassroots Guide for more information on Farm Storage Facility Loans at http://bit.ly/NSAC-FSFL) or contact a local Farm Service Agency office for a loan application (offices.usda.gov).
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