MEDIA RELEASE 053

CONTACT: Diane Ley, State Executive Director

(808) 441-2704

Email: diane.ley@hi.usda.gov

(Honolulu, Hawaii, October 7, 2011) – USDA Farm Service Agency (FSA) Hawaii and Pacific Basin State Executive Director Diane L. Ley announced that the loan limit for the Guaranteed Loan Program has increased to $1,214,000. The limit is adjusted annually based on the "Prices Paid to Farmers Index," compiled by the National Agricultural Statistics Service (NASS).

“Raising the guaranteed loan limit will allow FSA to better meet the financial needs of eligible farmers and ranchers in Hawaii, American Samoa, Guam and the Northern Mariana islands” said Ley "Farming and ranching are capital-intensive business activities," she said. “Costs for inputs, fuel and equipment are climbing every year.”

Another change to the guaranteed loan program affects the one-time loan guarantee fee charged on all FSA loans obligated after October 1, 2011. The one-time loan guarantee fee increased from 1.0 percent to 1.5 percent of the guaranteed portion of the loan.

During Fiscal Year 2011, the capital FSA extended to Hawaii farmers and ranchers totaled $5.28 million. That represents 121 direct and guaranteed loans made by FSA staff to producers. Notably, loans to beginning farmers, racial minorities, and females comprised 90% of the total.

Guaranteed Loans by FSA allow other lenders to provide agricultural credit to farmers who do not meet the lender's normal underwriting criteria. Farmers and ranchers apply for a guaranteed loan through a commercial lender, and the lender arranges for the guarantee. FSA typically guarantees up to 90 percent of the loss of principal and interest on a loan. Guaranteed loans can be used for both farm ownership and operating purposes.

Producers who are unable to obtain financing through a commercial lender or through a guaranteed loan, could be eligible for an FSA Direct Loan. These Direct Loans have a limit of $300,000 with the exception of Emergency Loans with a ceiling of $500,000. The maximum allowable combined guaranteed and direct indebtedness is now $1,514,000.

For more information on FSA’s farm loan programs, please contact an FSA Farm Loan staff member near you by calling a local FSA Office or by calling 808-441-2704., ext. 2