Today, U.S. Senators Charles Schumer and Kirsten Gillibrand announced United States Department of Agriculture (USDA) Secretary Tom Vilsack has cut interest rates on emergency loans in areas devastated by natural disaster. The current rate of 3.75% will be lowered to 2.25% and the USDA will simplify the process of issuing disaster declarations, resulting in a 40% reduction in processing time for counties affected by disaster. After Tropical Storms Irene and Lee, Schumer urged Secretary Vilsack to lower interest rates for Emergency Loans to make it less expensive for struggling farmers across New York to recover and rebuild.
"After disaster strikes, we should be making it easier, not harder for farmers who have suffered severe damages to their fields, their crops, and their livelihoods, to get up and running again," said Schumer. "Lowering the interest rates on emergency loans and speeding up processing time will be essential to recovery and could quickly put thousands of dollars back in the pockets of farmers. I'm pleased that USDA Secretary Vilsack has heeded that call, so that farmers will have more money to spend rebuilding barns, buying seed, or purchasing new livestock when disaster strikes."
"Our farmers took some of the absolute worst of last year's natural disasters. When our farms suffer, our entire economy suffers," Senator Gillibrand said. "Lowering interest on loans and making them easier to access will help our farmers along the path to recovery faster, and help strengthen our agriculture industry."
USDA's Farm Service agency provides emergency loans to help farmers recover from production and physical losses in floods or other natural disasters. These loans can help finance the replacement of property, cover production costs in the year that a disaster occurred, pay living expenses, and help cover other debts that can't be paid off due to the disaster. Farmers who live in a county, or contiguous county, declared by the President or the Secretary of Agriculture as a disaster area and who suffered 30% loss in livestock or crop production are eligible for loans.
Farmers can borrow up to 100 percent of actual production or physical losses up to a maximum of $500,000. The loans are typically repaid over a period of one to seven years, but particularly hard hit farms could have up to 20 years to repay the loans. Loans taken out for physical losses to real estate are typically repaid in 30 years. New York farmers have eight months after the disaster declaration to apply for the loans.
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