August 31, 2006

US state of Missouri lends a hand to small farmers to buy livestock

Small farmers seeking financing for the purchase of breeding livestock would now be able to obtain low interest loans from the Missouri Agricultural and Small Business Development Authority (MASBDA).

The Missouri General Assembly established a loan programme this year to provide around US$150,000 in tax credits to lenders who make breeding livestock loans to small farmers in the state.

A small farmer is defined as one who has less than US$250,000 in gross agricultural product sales a year. The farmer would be entitled to an interest-free loan for the first year and lenders would be issued with the tax credit.

Small farmers constitute the majority of Missouri's livestock industry that accounts for more than three billion dollars in cash receipts, Fred Ferrel, the director of the Missouri Department of Agriculture said.

Waiving the first year's interest would allow more money for farmers to increase their herd size or help new producers make their first livestock purchase.

Each farmer can only obtain one family farm livestock loan per immediate household and only purchase one type of livestock. Loans cannot exceed 90 percent of the cost of purchasing the breeding livestock.