LANSING, Mich. (WOOD) — Farmers are one step closer to possible relief during a difficult growing year.
“What it does, it really helps to augment the origination fees for the loans, keeps those costs down, gets it down to 1% for the interest rate,” explained Republican Rep. Mark Huizenga from Walker.
House Bill 4234 will free up $15 million for lending institutions to facilitate loans to farmers who meet the loss criteria. That financial support translates into much more for farmers and suppliers who were rained out this spring.
“That leverage amount basically will get them up to $300 million,” Huizenga said.
By subsidizing interest and loan origination fees, the state hopes to help farmers that suffer 25% or more in production losses, or agriculture suppliers who sell directly to farmers with similar losses.
The support isn’t unprecedented. When freezing temperatures ruined a large portion of the state’s cherry crop a few years ago, similar low interest loans were made available to producers. That means lenders have experience.
“These agencies are used to handling these kinds of crises, the loan process particularly. When you think about some of the bigger agencies that help farmers with financing, they know how to do this. It’s not like we have to establish anything. It just creates that financing mechanism for them,” Huizenga explained.
The measure passed both chambers with wide bipartisan support. The plan now goes to Gov. Gretchen Whitmer. If she signs it, those funds could be available relatively soon.