- Fire Blight-ravaged Growers Eligible for Low-interest Loans
The Aug. 9 designation, requested of Gov. Engler and supported by Michigan’s congressional delegation, responds to a severe outbreak of fire blight following unusually warm, humid and wet weather in May. Apple farmers in that area are now eligible for low-interest, emergency loans (currently 3.75%) from the USDA’s Farm Service Agency (FSA).
Fire blight, a highly contagious disease of apples and pears caused by a plant-eating bacterium, was intensified with heavy rains and hail that damaged trees and dispersed the disease, resulting in an estimated total loss of $42 million. Many trees were lost, while others will suffer production losses for years to come.
“We are very supportive of this designation and urge all producers to consider assistance through the low-interest loan program,” said Al Almy, director of the public policy and commodity division at Michigan Farm Bureau.
Additional financial assistance for all apple growers affected by low prices may be on the way, as well. On July 20 the U.S. Senate approved the agriculture spending bill for fiscal 2001, allocating $100 million in market loss assistance and $60 million in weather-related disaster assistance to apple growers across the country. The House approved $115 million, and the issue is now in conference committee.
Although the assistance is welcomed with open arms, some Michigan farmers fear it still won’t be enough. Last year’s low prices, largely due to the dumping of Chinese apple juice concentrate, coupled with this year’s fire blight outbreak, have left some growers grasping for a lifeline.
“It will help, but by no means will it be enough for some producers,” Almy said. “According to an economic analysis by the Farm Service Agency, Michigan will likely see about $10 million of the $100 million designated for market loss. For smaller Michigan farmers, payments will equal about 14% of their 1999 apple income, but for the larger producers, it may cover as little as 2%.”
Apple growers, in the past years, have kept their hands down. “They’ve weathered some tough years – without appealing for government assistance,” Almy said. “But the situation is so bad now that they stand to lose everything without some help. It should be noted that their economic viability is being directly impacted by measures beyond their control.”
Agriculture Secretary Dan Glickman’s disaster declaration names the counties of Antrim, Barry, Benzie, Berrien, Branch, Cass, Eaton, Grand Traverse, Hillsdale, Ingham, Ionia, Kent, Leelanau, Manistee, Muskegon, Newaygo, Ottawa and Van Buren as primary disaster areas. The declaration and eligibility also cover all contiguous counties for the same benefits. Contiguous counties include Allegan, Branch, Calhoun, Charlevoix, Clinton, Crawford, Gratiot, Jackson, Kalamazoo, Kalkaska, Lake, Lenawee, Livingston, Mason, Mecosta, Missaukee, Montcalm, Oceana, Osceola, Otsego, St. Joseph, Shiawassee and Wexford.
Farmers in eligible counties have eight months from the date of the declaration to apply for the loans to help cover part of their actual losses. FSA will consider each loan application on its own merits, taking into account the extent of losses, security available, repayment ability and other eligibility requirements.
Michigan is the third largest apple-producing state in the country behind Washington. In 1998, the most recent statistics, Michigan had 54,000 acres of apple production, producing 970 million pounds of apples with a value of $81.3 million.
Emergency loans are available to qualifying growers who meet all of the following criteria:
• Are established operators of family farms;
• Are citizens or permanent residents of the United States;
• Have adequate training or experience in managing and operating a farm or ranch necessary to assure reasonable prospect of success;
• Have suffered a qualifying physical loss, or a production loss of at least 30% in any essential farm or ranch enterprise;
• Cannot obtain commercial credit;
• Can provide collateral to secure an emergency loan;
• Can demonstrate that they have repayment ability.
Emergency loan funds may be used to restore or replace essential physical property, such as animals, fences, equipment, orchard trees; pay all or part of production costs associated with the disaster year; pay essential family living expenses; reorganize the farming operation; or refinance debts.
The loan limit is up to 80% of actual production loss (i.e., the value of lost crops, milk etc.), or 100% of the actual physical loss, with a maximum indebtedness under this program of $500,000.
For additional information about USDA low-interest loans, visit www.fsa.usda.gov/pas/disaster/assistance1.htm.
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