New Law Establishes Low Income Loan Program for Agricultural Disaster
Signed into law by Governor Snyder on June 26, 2012, the “agricultural disaster loan origination program of 2012” provides for a low interest loan program for growers, processors and agribusinesses affected by major crop loss from the extreme weather this spring. The program creates a partnership between private lenders and the state where private lenders extend a one percent interest rate to eligible growers and processors and the state supports the process by paying lenders a loan origination fee totaling five percent of the original loan amount, paid out over five years. The Michigan Farm Bureau estimates that for the maximum state investment of $15 million specified in the law, the state will support more than $500 million in annual economic activity.
Given estimates that between 80 – 95% of many tree and vine fruit crops in Michigan were destroyed by the early warm weather followed by late freezes, this program will hopefully provide a crucial source of cash flow for many growers, processors and agribusinesses. See the text of Public Act 193 of 2012 for more information.