Farmers welcome new loans to overcome disasters

By CATHERINE BYRNE
Capital News Service
LANSING — Dry bean farmer Carl Bednarski of Caro referred to his crop last year as a “complete disaster.”
“Without a crop, I have no revenue,” said Bednarski, a board member of the Michigan Farm Bureau.
Under a new law, Bednarski and other Michigan farmers hurt by weather-related crop losses may be eligible for zero-interest loans.
“A zero-interest loan will help satisfy the debt on dry beans and give us time to get back on our feet,” he said.
The program, introduced by Rep. Ron Jelinek, R-Three Oaks, will give up to $200 million in interest-free loans to qualifying farmers and $10 million to qualifying agribusinesses.
Unusually severe weather in 2001 financially crippled farmers across Michigan with 82 of 83 Michigan counties qualifying as federal agriculture disasters. Only the western Upper Peninsula’s Keweenaw County did not get the disaster rating.
Jelinek, a farmer himself, met with grape growers in his community who had a total loss of crops to discuss options.
“Last year was terrible,” he said. “I know what it’s like to invest in a crop with no return. It wasn’t just a regional problem–it was statewide.”
The law is similar to a zero-interest loan program used in 1986 to compensate for severe flooding that year.
Dan Wyant, director of the Michigan Department of Agriculture, said last year saw the worst conditions for the state in recent years.
“Every year in the last 10 years we’ve had certain counties qualify for weather-related disasters,” Wyant said. “It’s just the nature of the business, the nature of farming. But (the loan program) was justified and warranted this time because it was a statewide problem.”
Sen. George McManus, R-Traverse City, chairman of the Senate Appropriations agriculture subcommittee, wants the Legislature to encourage farm development.
“The best way to preserve farmland and open space is to allow a farmer to farm,” McManus said. “This law can be the difference between a farmer planting seeds or planting a ‘for sale’ sign.”
Jelinek also believes the state needs to assist farmers in anyway possible.
“We do very little to help our farmers,” he said. “As a state, we need to come to the plate for them.”
McManus contends giving back to farmers is “the least we can do.”
“Our farmers provide Michigan citizens millions of acres of open space and one of the world’s safest food supplies,” he said. “I want to see crops, not condominiums, growing in our farm fields.”
The maximum amount available to a farmer who had financial difficulty is $150,000. Repayment starts at the beginning of the third year of the loan’s maximum five-year term.
Bednarski said the loan keeps up his confidence for the next season.
“Some people may change their dry bean acreage this year because they may not feel comfortable with that much risk,” he said. “But farmers are always optimistic, and we hope that with such a short supply from last year, we’ll get a better price for beans this year and be ready to repay the loans when payments come due in 24 months.”
Ron Nelson, Farm Bureau manager of state government affairs, believes the program offers big benefits to farmers.
“If a farmer needs to borrow $100,000 at 6 percent interest, that’s $6,000 the first year, which doesn’t make or break the bank,” Nelson said. “But, five years later, you’ve racked up $30,000 in loans. Initially it doesn’t seem like that big of a deal, but this will be a huge help to farmers.”
Both Jelinek and Nelson have heard overwhelming support from the farming community.
“I’ve talked to quite a few farmers and they’ve been excited and grateful,” Jelinek said. “A farmer can cover last year’s losses while he moves ahead and remains solvent.”
Nelson said MFB’s phones are ringing off the hook.
“We’ve gotten numerous calls from farmers asking, ‘Where do I apply?'”
© 2002, Capital News Service, Michigan State University School of Journalism