(St. Paul, MN) – On Thursday, March 12th, the Minnesota Senate approved $50 million in bonding for the Rural Finance Authority (RFA).  The RFA is Minnesota’s main agricultural lending arm and partners with community banks to provide farmers with lower interest rates.  This bill requires priority be given first to beginning farmer loans, second to seller-sponsored loans, and third to agricultural improvement loans.

“Rural Minnesota and our farmers are fundamental to the state’s economy. We prioritized them with this bill because the RFA loans have nearly run out of funding during this critical time,” said Senator Torrey Westrom (R-Elbow Lake), Chair of the Senate Agriculture, Rural Development, and Housing Finance committee. “The economy has been tough on farmers for years, and it was important we support them as they are reorganizing their operating loans.”

Senator Andrew Mathews (R-Milaca) weighed in, saying, “We have to do everything we can to support struggling and beginning farmers. The replenishment of the RFA loans and the continuation of that option could turn the tide for many people this year.  I’m glad to see rural Minnesota prioritized early this session.”

RFA is a vital financing tool for farmers, especially as the agriculture sector faces continued hardships.  The funds are responsibly loaned, and the default rate is very low. Losses have been less than 1% since the program began in 1986.  RFA is nearly depleted, so quick legislative action was needed.

The bill passed unanimously.

More information on the RFA loan program can be found at https://www.mda.state.mn.us/financebudget/agfinance.