Growers get loan assistance

Region

Related Photos

Bacterial chancre, which multiplies in cold, wet weather, has done significant damage to area orchards, like these sweet cherry trees on Dennis Hoxie's Acme farm, because of freezing temperatures last spring. Record-Eagle file photo/Jan-Michael Stump

June 21, 2012

Growers get loan assistance

Storms and frost damaged crops across the region

By Bill O'Brien bobrien@record-eagle.com The Record Eagle Thu Jun 21, 2012, 07:14 AM EDT

TRAVERSE CITY — Help is on the way to Michigan farmers and processors for their weather-battered crops.

The state Legislature passed the Agricultural Disaster Loan Origination Program Act of 2012. It will make available low-interest loans of up to $1 million to assist farmers and other agricultural producers after a late winter storm and widespread frost damage conspired to decimate their crops.

Antrim County cherry farmer Greg Shooks said the program will provide farmers and processors with needed assistance to help keep them afloat until next year's harvest.

"It's going to be roughly 14 months before a fruit grower gets a check for something they've sent out," Shooks said.

He lost about 95 percent of his cherry crop between the early-March snowstorm that heavily damaged orchards and several subsequent frosts.

"This year was a perfect storm in a worst-case scenario," he said.

The program provides for 1 percent loans for up to five years, with the initial principal payments not required in some cases until 24 months after the loan was issued. Money can be used to refinance existing loans secured before Dec. 31.

Loans also are available for operating capital, including leasing or repairing farm equipment or to purchase crop insurance. Expenses including fuel, fertilizer and seed purchases also are covered.

Farm owners, operators and processors must have seen a loss of 25 percent or more in major operations, or a production loss of 50 percent or more in any single crop on farms located within a disaster area designated by the governor. It's similar to a state disaster loan program to help with the weather-damaged fruit crop season in 2002.

State Rep. Ray Franz, an Onekama Republican, sponsored the bill that quickly moved through the state House and Senate this month. Franz said Wednesday that Gov. Rick Snyder is expected to sign the bill, but no schedule for his approval is set.

"We've got commitments from the Department of Agriculture that (Snyder) has every intention of signing the bill," Franz said.

About 2,500 farms around Michigan sustained significant weather damage this year, state officials estimate. Another 50 to 100 Michigan processors also are affected. Franz described the economic impact on the state as "enormous," with some loss estimates near a half-billion dollars.

"It's been devastating," he said.

The bill does not included funds to implement the program, which lawmakers expect to take up in the next legislative session beginning in August. Franz said the state will use about $15 million in general fund money to provide loan guarantees and cover start-up costs. Most of the funding will come from private lenders, including Greenstone Farm Credit Services and Huntington Bank.