The Illinois Department of Agriculture has identified programs at both the state and federal level which either specifically support socially disadvantaged farmers, or which can be utilized by socially disadvantaged farmers. These programs offer options in commercial, large-scale agriculture as well as small-scale urban agriculture, agribusiness, and food programs. The USDA defines a Socially Disadvantaged Farmer or Rancher as "A farmer or rancher who has been subjected to racial or ethnic prejudices because of their identity as a member of a group without regard to their individual qualities. This term means a farmer or rancher who is a member of a socially disadvantaged group."
United States Department of Agriculture (USDA)
USDA New Farmer Overview (https://newfarmers.usda.gov/)
USDA Farm Service Agency (FSA)
Socially Disadvantaged Farmers Programming Overview (https://www.usda.gov/partnerships/socially-disadvantaged-farmers-and-ranchers): The U.S. Department of Agriculture's Farm Service Agency (FSA) makes and guarantees loans to eligible socially disadvantaged (SDA) farmers to buy and operate family-sized farms and ranches. Each fiscal year, FSA targets a portion of its direct and guaranteed farm ownership (FO) and operating loan (OL) funds to SDA farmers. Non-reserved funds can also be used by SDA individuals.
An SDA farmer or rancher is a group whose members have been subject to racial, ethnic, or gender prejudice because of their identity as members of a group without regard to their individual qualities. These groups consist of American Indians or Alaskan Natives, Asians, Blacks or African-Americans, Native Hawaiians or other Pacific Islanders, Hispanics, and women.
- Helps remove barriers that prevent full participation of SDA farmers in FSA's farm loan programs; and
- Provides information and assistance to SDA farmers to help them develop sound farm management practices, analyze problems, and plan the best use of available resources essential for success.
Farm Loan and Guarantee Programs (https://www.fsa.usda.gov/programs-and-services/farm-loan-programs/index)
- Socially Disadvantaged Farmer Down Payment Program: FSA has a special loan program to assist SDA and beginning farmers in purchasing a farm. Retiring farmers may use this program to transfer their land to future generations.
- The applicant must make a cash down payment of at least 5 percent of the purchase price;
- The maximum loan amount does not exceed 45 percent of the least of the purchase price of the farm or ranch to be acquired, the appraised value of the farm or ranch to be acquired, or $667,000 (Note: This results in a maximum loan amount of $300,150);
- The term of the loan is 20 years. The interest rate is 4 percent below the direct FO rate, but not lower than 1.5 percent;
- The remaining balance may be obtained from a commercial lender or private party. FSA can provide up to a 95 percent guarantee if financing is obtained from a commercial lender. Participating lenders do not have to pay a guarantee fee;
- Financing from participating lenders must have an amortization period of at least 30 years and cannot have a balloon payment due within the first 20 years of the loan.
- Socially Disadvantaged Farmer Land Contract Guarantees: These provide certain financial guarantees to the seller of a farm through a land contract sale to a beginning or SDA farmer. The seller may request either of the following:
- Prompt Payment Guarantee: A guarantee up to the amount of three amortized annual installments plus the cost of any related real estate taxes and insurance.
- Standard Guarantee: A guarantee of 90 percent of the outstanding principal balance under the land contract.
- Socially Disadvantaged Farmer and Beginning Farmer Sale of Inventory Farmland: FSA advertises inventory property within 15 days of acquisition. Eligible SDA and beginning farmers are given first priority to purchase these properties at the appraised market value.
- Direct Farm Loans: Direct Farm Loans: FSA's Direct Loan Program is designed to help farmers start, purchase, or expand their farming operation. From beginning farmers who have limited financial history to qualify for commercial credit to farmers who have suffered financial setbacks from natural disasters, FSA offers a variety of loans to provide additional resources farmers need to establish and maintain profitable farming operations.
- Guaranteed Farm Loans: FSA guaranteed loans are available to farmers who may not meet loan qualifications from a commercial lender. Guaranteed loans are made and serviced by commercial lenders, such as banks, Farm Credit System institutions, or credit unions.
- Farm Ownership Loans: Farm Ownership Loans may be used to purchase a farm, enlarge an existing farm, construct new farm buildings and/or improve structures, pay closing costs, and promote soil and water conservation and protection. The direct loans are available up to a maximum of $600,000. Microloans are also available.
- Farm Operating Loans: Farm Operating Loans may be used for normal operating expenses, machinery and equipment, minor real estate repairs or improvements, and refinancing debt. The direct loans are available up to a maximum of $400,000. Microloans are also available.
- Conservation Loans: Conservation Loans provide access to credit for farmers and ranchers who want to implement conservation measures on their land. These loans are available to both smaller and less financially established farmers and ranchers, and to larger and financially stronger farmers and ranchers.
USDA Office of Partnerships and Public Engagement (OPPE)
Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers and Veteran Farmers and Ranchers Grant (https://www.usda.gov/sites/default/files/documents/2501_FactSheet.pdf): This program provides grant-based funding to community-based and non-profit organizations, institutions of higher education, and Tribal entities to compete for financial assistance through the Outreach and Assistance for Socially Disadvantaged Farmers and Ranchers and Veteran Farmers and Ranchers Program (hereinafter referred to as the ''2501 Program''). Individual applicants do not meet the eligibility criteria. Funding is being provided to eligible entities who, in partnership with the Office of Partnerships and Public Engagement (OPPE), will conduct outreach initiatives and training to achieve the overall goal of the 2501 Program—to assist socially disadvantaged and veteran farmers and ranchers in owning and operating farms and ranches while increasing their participation in agricultural programs and services provided by the U.S. Department of Agriculture (USDA).
United States Environmental Protection Agency (USEPA)
Local Foods, Local Places Program (https://www.epa.gov/smartgrowth/local-foods-local-places): Local Foods, Local Places helps communities revitalize neighborhoods through development of local food systems.
Local Foods, Local Places aims to support projects that do all of the following:
- Create livable, walkable, economically vibrant main streets and mixed-use neighborhoods.
- Boost economic opportunities for local farmers and main street businesses.
- Improve access to healthy, local food, especially among disadvantaged populations.
The Local Foods, Local Places program will provide selected communities planning assistance that centers around a two day community workshop. At the workshop, a team of experts will help community members develop an implementable action plan that promotes local food and neighborhood revitalization.
Illinois Department of Agriculture
Specialty Crop Block Grant (https://www2.illinois.gov/sites/agr/Assistance/IllinoisFarmPrograms/speciality-crop-grants/Pages/default.aspx): These funds will support projects that are intended to expand the availability of fresh, locally-grown produce and strengthen the competitiveness of the state's specialty crop industry. To encourage further expansion of this industry, and to take full advantage of the allocated funds, the department invites the development of projects pertaining to the following issues affecting the specialty crop industry:
- enhancing food safety;
- improving the capacity of all entities in the specialty crop distribution chain to comply with the requirements of the Food Safety Modernization Act, for example, by developing "Good Agricultural "Practices," "Good Handling Practices," "Good Manufacturing Practices," and in cost-share arrangements for funding audits of such systems for small farmers, packers and processors;
- investing in specialty crop research, including research to focus on conservation and environmental outcomes;
- developing new and improved seed varieties and specialty crops;
- improving pest and disease control;
- increasing child and adult nutrition knowledge and consumption of specialty crops;
- improving efficiency and reducing costs of distribution systems; and sustainability
Illinois Finance Authority
Agriculture Program Overview (https://www.il-fa.com/programs/agriculture)
- Beginning Farmer Bond Program: The purpose of the Beginning Farmer Bond Program is to provide affordable financing to new, low net worth farmers for financing capital purchases. IFA works with the borrower's local lender to provide this financing. IFA issues a tax-exempt bond for the amount and with the terms of the loan. Because the interest income to the lender is exempt from federal income tax, the lender is able to charge a lower rate to the borrower.
- Young Farmer Guarantee Program: The Young Farmer Guarantee Program is designed to enhance credit availability for younger farmers who are purchasing capital assets such as land, buildings, machinery, equipment, breeding livestock, and soil and water conservation projects.
- Working Capital Guarantee Program: The Working Capital Guarantee Program is a guarantee program designed to enhance credit availability for a farmer, producer or agribusiness for needed input costs related to and in connection with planting and raising agricultural crops and commodities in the State of Illinois. Eligible input costs include, but may not be limited to, fertilizer, chemicals, feed, seed, fuel, parts, and repairs.
Office of the Illinois State Treasurer
Ag Invest (https://illinoistreasurer.gov/Invest_in_Illinois/Ag_Invest): The Treasurer's Office partners with approved financial institutions to provide qualified farmers, agri-business and agriculture professionals below-market rate loans to start, expand or add value to their farm operations. The loans provided by the financial institution can be used for the purchase of farm equipment, purchase of land, construction-related expenses, provide operating lines of credit or other costs related to conventional or sustainable farming.
The Ag Invest Annual Agriculture Loan program makes loans more affordable for farmers and agricultural professionals. The loans can be used to help pay for the annual start-up costs associated with seed, fertilizer, plants, salaries, transportation cost, transitioning, milling, processing, crop insurance, and other qualified expenses.
The Ag Invest Long Term Agriculture Loan program makes loans more affordable for farmers and agricultural professionals. The loans can be used to help pay for major expenses like machinery, purchase of land up to $400,000, building construction, milling, processing, transportation cost, fees, salaries, irrigation systems and other qualified expenses.