ND Department of Agriculture Press Releases

FOR IMMEDIATE RELEASE JANUARY 27, 2010

STATE BANK EXTENDS AG DISASTER LOAN PROGRAM

BISMARCK – Agriculture Commissioner Doug Goehring says the State Industrial Commission’s decision to extend the Farm Disaster Relief Loan Program is a direct response to the problems producers are facing because of unusually harsh weather conditions and collapsed beef prices.

“Many producers have been impacted – some severely – by last year’s weather events, coupled with a depressed market for beef,” Goehring said. “Extending the disaster loan program for several months will help producers get a good handle on their current financial situation.”

The Industrial Commission – Gov. John Hoeven, Attorney General Wayne Stenehjem and Goehring – which oversees the state-owned Bank of North Dakota, voted Monday to extend the disaster loan program until June.

“We have had record snowfall, major livestock losses, widespread flood damage and prevented planting, a late harvest and a collapsing market,” Goehring said. “All of this threw a curveball to producers who are now trying to market a smaller-than-expected calf crop and/or low-protein wheat. In either case, they cannot break even, and that’s causing a lot of anxiety.”

Goehring said the weather conditions and especially the late harvest mean that many producers are still closing out their 2009 books.

“There is still some corn out there to be harvested, and that means some producers do not know what their 2009 income will be, and they cannot service their debt,” he said. “BND will work with these operators and their local lenders to make sure the money is there for the upcoming crop season.”

Under the disaster program, BND can provide up to $500 thousand or 75 percent toward a loan for refinancing term debt or amortizing operating debt carryover. The loans can be made only to eligible farmers and only in cooperation with a local lender.

More information about the disaster loan program is available at www.banknd.nd.gov/lending_services/pdfs/disasterreliefloanprogram.pdf.

Goehring said that the Bank of North Dakota (BND) has other loan programs to help them get the money they need for 2010 operations or to restructure operating debt.

“Working with local lending institutions, the Bank of North Dakota can leverage additional funds needed for the upcoming crop season or to refinance an old loan,” Goehring said. “Through its Farm Operating Loan Program, BND can provide up to $400,000 or 65 percent of a 2010 farm operating loan to an eligible farm borrower,” Goehring said. “The rate on BND’s share of the operating loan is BND’s base rate less 1 percent, and is now 2.25 percent.”

The Family Farm Loan Program enables BND to provide an eligible producer with up to 90 percent of a term loan in participation with a local lender. The loan may be used to restructure operating debt carryover or to refinance debt on land, livestock or equipment. The rate on BND’s share of the loan is the same as the Farm Operating Loan Program.

The nation’s only state-owned back, the Bank of North Dakota was established in 1919 with the mission of "promoting agriculture, commerce and industry" in North Dakota.

More information on BND and its agricultural lending programs can be found at www.banknd.nd.gov.

-30-