(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.”

“Farmers are the backbone of our state, and that’s why we put the RFA loan bill at the top of our list this session,” said Senator Mark Koran (R-North Branch). “We are moving into another stressful season for farmers. I hope the replenishment of this fund will give them the hope they need to achieve their aims this year.”

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.