On Thursday, March 12, the Minnesota Senate approved $50 million in bonding for the Rural Finance Authority (RFA). The RFA is Minnesota’s main agricultural lending arm and partners with community banks to provide farmers with lower interest rates. This bill requires priority be given first to beginning farmer loans, second to seller-sponsored loans, and third to agricultural improvement loans.
“Greater Minnesota and our farmers and agricultural industry are a vital part of Minnesota’s state economy,” said Senator Jeff Howe (R-Rockville). “The RFA plays a critical role in supporting this industry and helping people as a financial tool. This year, that support is especially important for our farmers who have suffered from a devastating harvest season and were not insured or were underinsured.”
RFA is a vital financing tool for farmers, especially as the agriculture sector faces continued hardships. The funds are responsibly loaned, and the default rate is very low. Losses have been less than 1% since the program began in 1986. RFA is nearly depleted, so quick legislative action was needed.
The bill passed unanimously.
More information on the RFA loan program can be found at www.mda.state.mn.us/finance