Programs encourage farmer innovations

Agriculture is vital in Missouri. The state has the second-largest number of farmers in the nation, following only Texas. Agriculture also accounts for a major portion of the state's economy. For these and many other reasons, profitable farm businesses benefit all state citizens.

We are fortunate to have legislators who recognize this and support the farm sector. Because of their actions, the state-funded Missouri Agricultural and Small Business Development Authority has many programs to help new and expanding producers finance their operations.

The Missouri Value-Added Program helps producers develop innovative ways to add value to their raw commodities. Moving producers closer to consumers, it helps them find ways to transform raw goods into consumable products and enables producers to retain more profit on the goods they produce.

The Agricultural Product Utilization Contributor Tax Credit Program and New Generation Cooperative Incentive Tax Credit Program provide up to $6 million in tax credits annually to stimulate additional investment in new generation cooperatives and rural agricultural businesses that add value to agricultural products.

New generation cooperatives are a promising step in a new wave of farming. They allow producers to pool their financial resources and raw commodities to create higher-value products and reap more of the end product. Furthermore, tax credits sold under the Agricultural Product Utilization Contributor Tax Credit Program provide additional funds for the authority's value-added grants.

The Missouri Value-Added Grant Program provides grants for projects that boost local economies by adding value to agricultural goods. The grants are intended to finance activities associated with starting or expanding a business, such as feasibility studies and business and marketing plans.

The second program, the Missouri Value-Added Loan Guarantee Program, provides partial loan guarantees to banks, savings and loans, and Farm Credit System lenders. Under the program, lenders can receive a 25 percent first-loss guarantee on loans up to $250,000 that finance projects involving processing, manufacturing, marketing, exporting or adding value to agricultural products.

Eligible borrowers may also qualify for aid through the Missouri First Linked Deposit Program administered by the state treasurer's office.

Under the Beginning Farmer Loan Program, the authority issues tax-free bonds to lenders who make low-interest loans to farmers and small businesses. Up to $250,000 may be loaned to beginning farmers to buy land or make improvements.

Through the Single-Purpose Animal Facilities Loan Guarantee Program, the authority guarantees 25 percent of loans up to $250,000 that lenders make to independent livestock producers. The guaranteed loans can be used to finance breeding or feeder livestock, land, buildings, facilities, equipment, machinery and animal waste systems.

The third loan program, the Animal Waste Treatment System Loan Program, helps independent livestock producers secure direct loans for animal waste treatment systems for up to 10 years at terms below conventional interest rates. Loans can be used go buy land for lagoons, build animal waste facilities or purchase waste-handling equipment - all of which work to prevent potential surface and ground water contamination.

People with bright ideas for sustainable agriculture may also be able to try them out with the help of the Missouri Department of Agriculture and University of Missouri Outreach and Extension. The agencies are offering 30 sustainable agriculture demonstration awards through the Sustainable Agriculture Extension Program of MU and Lincoln University. The grants of up to $4,500 help farmers reduce their dependence on purchased inputs and help to protect and conserve natural resources. To be considered, a project or demonstration must be sustainable, meaning economically viable, environmentally sound and socially responsible. The deadline for application for this year's applications is Nov. 30, 2000.

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