As harvest is in full swing across the Hoosier landscape, it also is a time for you – as producers – to think about the next farming season. The U.S. Department of Agriculture Farm Service Agency (FSA) offers several loan programs that could work for your operations. These programs are critical for many producers to build and sustain their family operations, especially as input costs continue to increase. 

The current maximum loan limits are:

• Direct Farm Operating Loan - $400,000
• Direct Farm Ownership - $600,000
• Guaranteed Operating/Ownnership - $2,236,000

FSA’s Direct Loan Program is designed to help farmers start, purchase, or expand their farming operation.  FSA Guaranteed Farm Loans are available to farmers who may not meet loan qualifications from a commercial lender. FSA also provides youth loans to 4-H/FFA aged individuals. All of these programs can be accessed by visiting one of our eight Indiana farm loan offices.

This newsletter is complete with more details about our programs and loan rates. As always, our offices stand ready to assist you. Just give us a call!

We wish you a safe harvest, and a great fall with family and friends.

Sincerely in Agriculture,

The USDA Farm Service Agency’s (FSA) Direct Farm Ownership loans can help farmers become owner-operators of family farms, improve and expand current operations, increase agricultural productivity, and assist with land tenure to save farmland for future generations.

There are three types of Direct Farm Ownership Loans: regular, down payment and joint financing. FSA also offers a Direct Farm Ownership Microloan option for smaller financial needs up to $50,000.

Joint financing allows FSA to provide more farmers with access to capital. FSA lends up to 50 percent of the total amount financed. A commercial lender, a State program or the seller of the property being purchased, provides the balance of loan funds, with or without an FSA guarantee. The maximum loan amount for a joint financing loan is $600,000, and the repayment period for the loan is up to 40 years.

The operation must be an eligible farm enterprise. Farm Ownership loan funds cannot be used to finance nonfarm enterprises and all applicants must be able to meet general eligibility requirements. Loan applicants are also required to have participated in the business operations of a farm for at least three years out of the 10 years prior to the date the application is submitted. The applicant must show documentation that their participation in the business operation of the farm was not solely as a laborer.

Free basic coverage available for new and underserved loan applicants

Producers who apply for Farm Service Agency (FSA) farm loans will be offered the opportunity to enroll in the Noninsured Crop Disaster Assistance Program (NAP). NAP is available to producers who grow noninsurable crops and is especially important to fruit, vegetable, and other specialty crop growers.

New, underserved and limited income specialty growers who apply for farm loans could qualify for basic loss coverage at no cost.

The basic disaster coverage protects at 55 percent of the market price for crop losses that exceed 50 percent of production. Covered “specialty” crops include vegetables, fruits, mushrooms, floriculture, ornamental nursery, aquaculture, turf grass, ginseng, honey, syrup, hay, forage, grazing and energy crops.  FSA allows beginning, underserved or limited income producers to obtain NAP coverage up to 90 days after the normal application closing date when they also apply for FSA credit.

Producers can also protect value-added production, such as organic or direct market crops, at their fair market value in those markets.  Targeted underserved groups eligible for free or discounted coverage include American Indians or Alaskan Natives, Asians, Blacks or African Americans, Native Hawaiians or other Pacific Islanders, Hispanics, and women.

FSA offers a variety of loan products, including farm ownership loans, operating loans and microloans that have a streamlined application process.

NAP coverage is not limited to FSA borrowers, beginning, limited resource, or underserved farmers. Any producer who grows eligible NAP crops can purchase coverage.

Madyson and Jarred Richey are a brother sister duo from Scottsburg, Indiana. They have been utilizing the Farm Service Agency Youth Loan Program to purchase their 4-H animals and to grow their own cattle herd.

Both Madyson and Jarred are actively involved in their local 4-H & FFA groups. Madyson is a 10-year 4-H member and a 5-year FFA member. She served as an officer during each year in FFA. Jarred is in his 6^th year of 4-H and 1^st year of FFA.

Youth operating loans of up to $5,000 are available to eligible individual youths ages 10 to 20 to finance income-producing, agriculture-related projects. The project must be of modest size, educational, and initiated, developed, and carried out by youths’ participation in 4-H, FFA, tribal youth organizations, or similar agricultural-affiliated groups.

Through the youth loan program, Madyson and Jarred have been able to purchase quality animals without using their college saving or placing a financial burden on their parents.

“I have learned how important record keeping is and gained marketing knowledge which helps me make better decisions when selling cattle,” said Madyson.

Jarred added “When you sell your cattle each year, take that money and pay down or pay off your loan. It makes it much easier to get another loan if you need it.”

Return on Their Investment

The Richey duo are already seeing a return on their investment. They secured their first loans in 2020 when they each purchased a market steer and breeding heifer. Over the last 3 years, they have grown their herd to 11 cows and a couple heifers. They plan to continue to expand their herd by purchasing additional quality cattle in the coming years.

Both Madyson and Jarred have been responsible for daily feeding and overseeing of their cattle, as well as any preventative care. They assist the family with haying. Since Madyson recently left for college, Jarred, at age 14 is taking on her responsibilities knowing that when she is home on breaks, he will then get a break.

The awards bestowed upon them at the 2023 Scott County Fair are proof of their hard work and dedication.

• Jarred had the Champion Simmental steer and heifer and was also champion intermediate showman.
• Madyson had Champion Shorthorn heifer, Champion Chianina steer, and won master showman. She also competed in the round robin and became master all around showman of the six species exhibited at the fair.
• They also shared the cow/calf pair champion as well. This cow was one of the first purchases Madyson made with the USDA loan.

“I love working with the youth loan program, said Megan Downing, FSA Farm Loan Officer, Washington County. “It is rewarding to see our youth excited about the future of agriculture and I love that I get to play a small part in fueling that passion. The youth loan program is a great way for FSA to introduce our programs to the next generation of Beginning Farmers.”

Looking to the Future

With a history of farming in their family, they are the 9^th generation on their mothers’ side to look to farming as part of their futures. Both, Madyson and Jarred, plan to continue to utilize youth loans to grow their herd. Looking farther into the future, they are also interested in utilizing other FSA loan programs to purchase equipment and farmland.

Madyson and Jarred recommend the Youth Loan program for aspiring youth. “You always hear that you must be 18 to take out a loan, so it was very surprising to me that I could have a loan at my age,” said Jarred.

 “Working with USDA was very easy, and everyone has been extremely helpful every time we have had questions,” said Madyson. ‘This is a great program for youth to begin building their credit while having someone along to guide them on the importance of good credit and the steps it takes to maintain it.”

Tyler Gough and his wife, Gentry McDufee, recently utilized a FSA Direct Farm Ownership Loan to purchase a historic property in Wayne County to pursue their passion for agriculture and food. Also, to help make their dream their reality they secured a FSA Annual Operating Loan.

Although Tyler and Gentry are both descendants from farmers in Indiana, they are a couple of generations beyond having inherited a family farm and consider themselves first-generation farmers.

In 2023, Tyler and Gentry purchased an 18-acre historic farm. Originally, this Indiana Landmark had been a 78-acre farm, from 1839 through the early 1930’s. The property also had a historical museum from the 1970’s until 2023. Tyler and Gentry are excited to breathe life into the historic farm once again. They plan to grow a variety of fruits and vegetables, install a nut grove and fruit orchard, raise heritage breed animals on a small scale, and grow flowers and native plants.

Their journey really started when their family rented a home where the landlord did not allow gardens to be planted. Eager to teach their young children gardening skills and the benefits that come with it, they started a community garden. Tyler then had the idea to provide garden plots to people with the understanding that they would also provide produce for those who do not have space to grow or the means to buy fresh produce for their families. This translated into farming for a non-profit. For the past 12 years Tyler and Gentry have worked at Indy Urban Acres growing hundreds of thousands of pounds of beautiful fruits and vegetables, all delivered to food pantries in Indianapolis.

Their passion is food. Tyler and Gentry feel there is nothing more satisfying than providing good food for your family and your community. There is an infinite variety of product, method, skill and wisdom in producing, preserving and cooking. They look forward to being a part of a community of farmers that cooperate and encourage each other in providing the best food to their neighbors. 

‘USDA programs have impacted our operation very much. We wouldn’t have had the ability to buy our farm without the help of our FSA loan officer, Bridgette Wanhainen, Henry County FSA. She is our hero’ stated Gentry.  ‘She not only helped us navigate the entire process but advised us in selecting the correct loans to fit our operation, and most of all was able to see our vision and be excited about the future of our farm’.

‘We have also received amazing support and advice from people who work for Soil and Water Conservation Districts, NRCS, and Indiana Association of Soil and Water Conservation Districts Urban Soil Health and are especially grateful for the support we’ve received from Elli Blaine (IASWCD), Cara Bergschneider (NRCS), Kevin Allison (MCSWCD) and Meghan Ayers’ said Tyler. ‘We look forward to building further relationships with the amazing people who work for these programs to support farmers.’

In their first season, the most challenging part has been the process of bringing life and balance back to the soil. They have implemented the first steps in a cover crop rotation, planted perennial native pollinator habitat, and will be working with DNR for invasive plant removal in the forested areas. They are looking forward to utilizing other USDA programs such as crop insurance, Non-Insured Crop Disaster Assistance Program (NAP), Conservation Reserve Program (CRP) grass waterway for erosion control, forest management, and NRCS Environmental Quality Incentive Program (EQIP) initiatives such as cover crop management, pollinator habitat management and high tunnels.

Tyler and Gentry’s future goals and plans for the operation are to provide a space to learn, collaborate and enjoy great food with the community and neighboring farmers. They would love to be able to include programming that utilizes the historic venue and functional buildings to teach historic methods of farming, food preservation and textile production, alongside new innovations.

Tyler and Gentry recommend that aspiring farmers who are looking for the resources needed to get started, to expand or to sustain a farming operation, reach out to FSA so they to can get started on the path to pursuing their dreams of becoming a farmer.

USDA announced loan interest rates for October 2023, which were effective October 1, 2023. USDA’s FSA loans provide important access to capital to help agricultural producers start or expand their farming operation, purchase equipment and storage structures, or meet cash flow needs.

FSA also offers guaranteed loans through commercial lenders at rates set by those lenders. 

Check your eligibility for FSA loans by utilizing the Farm Loan Assistance Tool. Find out which of these loans may be right for you by using our Farm Loan Discovery Tool.

Producers can explore available options on all FSA loan options at fsa.usda.gov or by contacting your local USDA Service Center.