Bills propose beginning farmer loans, incentives

Three bills propose to help beginning Oregon farmers overcome cash shortages by creating a new loan program, fixing an existing one and assisting with education costs.

Due to the aging population of farmers and rising cost of farmland, Oregon should try to smooth the transition in farm ownership expected to occur in coming decades, said Ivan Maluski, policy director of the Friends of Family Farmers nonprofit.

Kristin White, a farmer in Washington County, said financial barriers can inhibit new farmers from expanding or sustaining their businesses.

“At a time only one percent of Oregon’s population is farming, we cannot afford to push out enthusiastic young people,” she said during a March 14 legislative hearing.

Under House Bill 3085, a new program would offer loans of up to $500,000 to family farmers with a net worth below $1.5 million and beginning farmers with a net worth below $750,000. The program would be overseen by the Business Oregon economic development agency in consultation with the Oregon Department of Agriculture.

The new program would serve as an alternative or supplement to Oregon’s existing “aggie bonds” loan program, which provides a tax break to private lenders who offer reduced-interest loans for land and equipment to beginning and expanding farmers.

Only two “aggie bond” loans have been made since the program was created in 2013, with just a single lender participating, said Maluski. “We had much higher hopes for aggie bonds to help address this problem.”

The intent of House Bill 3091 would be to allow more farmers to benefit from the program by reducing the associated fees, which currently include $250 for the application fee and 1.5% of the loan for a processing fee, with a minimum payment of $1,500.

Under the bill, those fees would be reduced to $100 and 1% of the loan, with a minimum processing payment of $500.

Finally, a fund would be created under House Bill 3090 to provide student loan repayment subsidies, scholarships and other incentives for people studying agriculture at Oregon colleges and universities.

The bill doesn’t specify how much would be allocated to the fund.

The program would be overseen by the Oregon Department of Agriculture and would establish preferences for students who intend to grow food with organic practices or for local markets.

The Oregon Farm Bureau objects to the preference for organic practices and local markets over other safe and legal farm practices and markets, said Mary Anne Cooper, vice president of public policy for the group.

“We prefer the program be available to all farmers and ranchers looking to get into the industry,” she said.

Grass seed grown in Oregon is often exported elsewhere, and while it’s not food, it’s often used for cover crops that improve production of corn and soybeans or for forage that’s consumed by cattle, said Roger Beyer, executive director of the Oregon Seed Council.

“There really isn’t a huge demand for organic grass seed,” he said. “Our grass seed is feeding the world even if people aren’t eating the grass seed.”