Unlock the Benefits of the Farm Storage Facility Loan Program for Your Agricultural Needs

Farm Storage Facility Loan Program Overview

The Farm Storage Facility Loan Program (FSFL), administered by USDA’s Farm Service Agency (FSA), provides low-interest loans for farmers to build or upgrade storage units, including cold storage and packing facilities. Historically, these loans have primarily benefited grain farmers, but recent changes have expanded support to fruit and vegetable producers. These changes improve farmers’ ability to finance storage and packing sheds, helping them maintain the quality of their products and enhance their capacity to sell in local and regional food markets.

Program Basics

The FSFL Program provides low-interest loans for producers to build, upgrade, or purchase permanent or portable facilities to store commodities. Eligible commodities include:

• Corn, grain sorghum, rice, soybeans, oats, peanuts, wheat, barley, malted grains, or minor oilseeds harvested as whole grain
• Hay and renewable biomass
• Pulse crops (lentils, chickpeas, dry peas)
• Fruits (includes nuts) and vegetables
• Honey, maple sap, and maple syrup
• Meat, poultry, milk, eggs, cheese, butter, and yogurt
• Aquaculture
• Floriculture and hops

Eligible uses for these loans include:

• Grain storage cribs, bins, and silos, and related electrical equipment
• Cold storage buildings and equipment
• Packing sheds and handling equipment
• Portable storage structures, portable equipment, and storage and handling trucks

Eligibility

To be eligible for FSFL loans, the borrower must:

• Produce an eligible commodity
• Demonstrate a storage need
• Have a satisfactory credit rating and the ability to repay the loan
• Provide proof of all peril insurance and, if applicable, flood insurance
• Provide proof of multi-peril crop insurance (MPCI) or Non-Insured Crop Assistance Program (NAP) coverage

Several other eligibility criteria may also apply.

Loan Terms and Interest Rates

• Maximum Loan Amount: $500,000
• Interest Rate: Fixed, based on U.S. Treasury securities
• Loan Terms: 3, 5, 7, 10, or 12 years
• Down Payment: 15% for regular loans, 5% for microloans
• Application Fee: $100 non-refundable

For loans up to $50,000, a microloan option is available with less paperwork and fewer eligibility requirements. Interest rates are lower than those available commercially, and loans are repaid in equal amortized installments.

Success Stories

• Hearty Roots Community Farm (NY): Received an FSFL to finance a cold storage and packing facility for their community-supported agriculture (CSA) operation.
• BelleWood Acres (WA): Used an FSFL to purchase and install a cooler, increasing on-farm storage capacity and diversifying market opportunities.

How to Apply

Loan applications should be filed in the local FSA Office that maintains the farm’s records. The Farm Storage Loan application form is CCC Form 0185 and can be found on the FSFL overview page.

Program History and Funding

The FSFL program was started administratively in 2000 by FSA. The program has permanent mandatory funding through the Commodity Credit Corporation (CCC) and does not require a congressional authorization or appropriation. The 2008 Farm Bill added fruits, vegetables, and cold storage as eligible commodities, increased the maximum loan term to 12 years, and allowed for partial loan disbursement during construction.

Conclusion

The Farm Storage Facility Loan Program provides essential support for farmers looking to enhance their storage and handling capabilities, ensuring their products are kept in optimal condition before reaching the market. By offering low-interest financing and flexible loan terms, the program helps farmers of all scales improve their operations and meet the demands of local and regional markets.

FAQs