Farmers told to apply for state loan program

From press release

SPRINGFIELD—During Agriculture Day festivities at the Illinois State Fair, Gov. Rod R. Blagojevich outlined two ways farmers can receive financial assistance to help shoulder the effects of the drought.

The governor told farmers that nearly $87 million is available through the Illinois Finance Authority (IFA) to help farmers obtain loans and reduce the costs of their existing debt. Blagojevich also announced an additional 15,000 acres has been funded for enrollment in the Conservation Reserve Enhancement Program (CREP). That means $50 million in new state and federal grants for farmers who participate in the program.

The IFA is offering up to $87 million in agricultural loan restructuring guarantees. The restructuring program allows farmers to consolidate their debt and spread out their repayments over a long term. These state-backed loans provide lending institutions with an 85 percent guarantee—allowing lending institutions to assume far less risk, and allowing producers that may otherwise not qualify for assistance to receive an institution’s support. The IFA’s program offers up to $500,000 in loan assistance and loans can be in place for up to 30 years.

IFA’s program is open to farmers regardless of their loss in seasonal yield, and since the program is continuously open for enrollment, producers will be able to reevaluate their finances after the 2005 harvest and, if necessary, seek financial assistance.

In June, the governor activated the Drought Response Task Force to monitor and respond to economic and ecological impacts of the drought. In July, Blagojevich reached out with the assistance of Illinois USDA-Farm Service Agency offices and the Illinois Department of Agriculture to the U.S. Secretary of Agriculture, resulting in a disaster declaration. As a result of the governor’s declaration, farmers in nearly every Illinois county are eligible to apply for the USDA-Farm Service Agency’s low-interest emergency loan program.

Additionally, in recent weeks, the Illinois Department of Agriculture posted the Illinois Hay and Straw Directory on its Web site. The Directory provides livestock producers with a one-stop resource to locate straw and hay, and straw and hay producers with a location to market their services.

Even as the governor and his administration responded to the plight of farmers, conditions continue to deteriorate, with temperatures above normal, and rainfall amounts below normal. As a result, the Illinois Agriculture Statistics Service reported that surface soil moisture went from 52 percent to 68 percent in the “very short” category across the state. Much of northern and western Illinois remain in an “extreme” drought, according to the U.S. Drought Monitor. “Extreme” drought is the third of four stages of drought. Much of the rest of the state is in “moderate” to “severe” drought.

The Drought Response Task Force is next scheduled to meet Friday, Aug. 26 at 1:30 p.m., at the Department of Natural Resources Headquarters in Springfield. Scientists and policy-makers on the task force include members of the Illinois State Water Survey, Illinois Department of Natural Resources, Illinois Emergency Management Agency, Illinois Department of Agriculture, Illinois Environmental Protection Agency, Illinois Department of Public Health, the Illinois Commerce Commission, Office of the State Fire Marshal and United States Geological Survey.

The governor and the U.S. Department of Agriculture also announced an additional 15,000 acres has been funded for enrollment in the Conservation Reserve Enhancement Program (CREP). The expansion will enhance efforts to improve water quality and increase wildlife habitat along the Illinois River basin.

The CREP program is administered by USDA’s Farm Service Agency. Under CREP agreements, federal and state resources are used to safeguard environmentally sensitive land. Farmers can enroll in CREP agreements for a period of 10 to 15 years. Through the program, farmers remove land from agricultural production and plant native grasses, trees and other vegetation to improve water quality, soil and wildlife habitat.

Blagojevich’s Fiscal Year 2006 budget included $10 million for the CREP program. As a result of the governor’s commitment, Illinois is now able to leverage a significant federal match for the program. Specifically, the U.S. Department of Agriculture will provide 80 percent—or approximately $50 million—of the funding for the CREP expansion, and the state of Illinois will contribute the remaining 20 percent—or approximately $10 million.

Since the Illinois CREP program’s inception in March 1998, more than 109,000 acres and 5,416 individual contracts have voluntarily been put into the program. Illinois currently ranks second in the country in the total number of acres in the CREP program. Implementation of CREP is a partnership of the USDA—Farm Service Agency, USDA—Natural Resources Conservation Service (NRCS), the Illinois Department of Agriculture, Illinois Environmental Protection Agency, Illinois Department of Natural Resources and County Soil and Water Conservation Districts.

More information about CREP can be found on the USDA Web site at

Drought-related resources

USDA Farm Service Agency Web site:

USDA Farm Service Agency—Illinois office: 217/241-6000

USDA Farm Service Agency—Illinois Office Web site:

Illinois Finance Authority Web site—Agriculture Programs:

Illinois Finance Authority—Chicago: 312/651-1300; Peoria: 309/495-5959

Illinois Finance Authority—Springfield: 217/782-5792; Carbondale: 618/453-5566

Illinois State Water Survey Drought Response Task Force:

Illinois Department of Agriculture Hay and Straw Directory:

From the Aug. 24-30, 2005, issue

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