Last Updated January 26, 2010
Conservation Loan & Loan Guarantee Program
Providing direct or guaranteed conservation loans to qualified borrowers
The 2008 Farm Bill creates a newly revised loan authority for USDA's Farm Service Agency to provide direct or guaranteed conservation loans to qualified borrowers. Eligible farmers or ranchers, including farmer cooperatives, private corporations, partnerships, or limited liability companies, can apply for a loan to cover the costs of:
"Qualified conservation projects" such as:
- Installation of conservation structures or water conservation systems
- Establishment of forest cover
- Establishment of permanent pasture
- Conservation practices needed to comply with highly erodible land "compliance" requirements
Conservation buffer practices such as:
- Grassed waterways
- Riparian buffers and filterstrips
- Living snow fences, and other similar vegetative practices
A conservation project is "qualified" for a loan if it is included in a conservation plan that is approved by the Natural Resources Conservation Service.
The 2008 Farm Bill also establishes a priority for the conservation loan program for qualified beginning or socially disadvantaged farmers and ranchers, owners or tenants that use the loans to convert to sustainable or organic agricultural production systems, and producers who use the loans to build conservation structures or establish conservation practices to comply with highly erodible land "compliance" regulations. In addition, USDA is to give strong consideration to applicants who are on waiting lists to receive farm bill conservation program financial assistance.
Direct and guaranteed conservation loans operate under the same rules and loan limitations as regular direct and guaranteed FSA farm ownership loans with two exceptions. First, for guaranteed loans the Farm Service Agency can guarantee no more than 75 percent of the principal amount of the loan, a lower rate than normal. Second, for both direct and guaranteed loans, the borrower does not have to be a family-sized farm, does not have to demonstrate an inability to secure credit from private, commercial sources at reasonable terms, and does not have to apply for commercial credit during the term of the loan should it become available at reasonable terms.
The Conservation Loans program is administered by the Farm Service Agency of USDA. Information about the program will be posted on the FSA website: www.fsa.usda.gov
For information and applications, go to your FSA regional Service Centers or to your state FSA office. You can locate all of the contact information by clicking on your state at:
Direct Loan Branch Chief
Farm Service Agency
Guaranteed Loan Branch Chief
Farm Service Agency