A billion dollars of funding set aside to help Ohio farmers is sitting unused on the state’s Ag-LINK balance sheet.
“We want more farmers to be able to take advantage of this program,” Ohio Treasurer Robert Sprague said Wednesday. “Whether you’re farming 150 acres, or 1,500 acres, or 15,000 acres, you can benefit from this program.”
Only $285 million of the allocated $1.4 billion has been borrowed, leaving 79.6% of the program’s funding still available to help cover short-term spending needs in the agricultural sector.
Ag-LINK helps farm operators, agribusinesses and agricultural co-ops finance upfront operating costs for feed, seed, fertilizer, fuel, equipment and other operational essentials.
“We’re trying to solve a problem for Ohio farmers,” Sprague said during a visit to the News Journal Wednesday morning. “Farmers have always been the backbone of Ohio’s economy, but the ravaging effects of inflation are breaking their backs this year.”
New Ag-LINK guidelines
Ag-LINK was formed three decades ago, but the treasurer said it “simply wasn’t built to deal with inflation.”
That’s why his office has revamped the program to use the state’s treasury to cover rising input costs.
Sprague explained that the state’s inflation has reached 9.1%, a 40-year high. Despite wage increases, he said real incomes have gone down 2.4% this year alone.
“There are several things we did to fight back against inflation,” Sprague said.
First, loan caps were more than tripled, increasing from $150,000 to $500,000 annually.
The application window for funding was then increased from just January and February to year-round for livestock farmers.
“The third thing farmers said to us was, ‘We would like you to consider agriculture cooperatives because we all buy most of our things through a co-op,'” Sprague said. “So we made, for the first time, agricultural cooperatives eligible for these discounted loans.”
Set to vary with interest rates
Loans are financed at rates of between 0.5% and 3% less than the typical interest rate.
As of Tuesday, nearly 1,300 borrowers statewide were using $285 million of the program’s money.
Richland County had 26 loans totaling $3,511,150; Crawford County had 58 loans totaling $16,061,125, and Ashland County had nine loans totaling $1,681,212.
“We know that in the future as interest rates increase, that this program is going to be even more valuable,” Sprague said. “As interest rates go up, we will be able to offer even more of a discount for farmers.”
The rates of individual loans will be set by the financial institutions — eligible banks, credit unions and farm credit lenders — already used by borrowers.
“I’m pleased to report that over the first six months of the changes to the Ag-LINK program, we’ve actually quadrupled the total dollar amount of loans that we are helping lower the interest rate on,” Sprague said.
‘Not a crisis of Ohio’s doing’
The treasurer has been touring the state throughout the year to meet with farmers who have been hit hard by rising costs.
He was recently at a 3,000-acre farm in Wood County where he learned the cost of Roundup herbicide went from $11 a gallon last year to $74 this year.
“That’s their main herbicide that they apply,” Sprague said. “He said the cost of diesel for harvest (at the Wood County farm) has gone up from $30,000 last year to $70,000 this year.”
A woman in Noble County told him that her bill for nitrogen fertilizer went up from $300 per ton last year to $1,100 this year.
Since many farms purchase supplies a year ahead, a good portion of them have not yet been fully affected by the rising costs.
“This is not a crisis of Ohio’s doing,” Sprague said. “This is not something we created. It was created in Washington, D.C., by the massive deficit spending they’ve done over the last three years, under both administrations.”
The state treasurer said the $5.8 trillion the U.S. government has spent since the start of the pandemic was more than the entire amount of the national debt just two decades prior.
“We’ve spent that since May of 2020,” Sprague said. “Ultimately, Washington, D.C., needs to get their spending under control and they need to balance their budget.”