NR00-12 May 18, 2000
Low Interest Agricultural Loans Now Available for Part-Time Farmers and For Processing and Manufacturing of Ag Products
Honolulu – Governor Benjamin Cayetano signed ACT 51(HB 2996, H.D.2) on April 26, 2000 authorizing the Hawaii Department of Agriculture (HDOA) to extend low interest agricultural loans to part-time farmers and to food manufacturers.
“We want to encourage our new farmers to continue to work agricultural lands and produce diversified crops for local consumers as well as for export,” said Gov. Cayetano. “Act 51 not only helps to ensure their farming success, but also offers opportunities to add value to our raw products through processing and manufacturing.”
While previous government programs were tailored for full-time farmers only, Act 51 recognizes that increasing numbers of new farmers are part-time farmers who want to expand their farm production and profitability. With the decline of the industries of sugar and pineapple, more agricultural lands are available for diversified crops, including fruits, vegetables and ornamental crops.
Many of the state’s new part-time farmers are also recent immigrants to the U.S. and Act 51 reduces the residency requirement for loan applicants who are permanent resident aliens from at least five years to at least three years.
The maximum that part-time farmers may borrow is $25,000 with a 10-year repayment period at one percent below the prime lending rate or at seven-and-a-half percent, which ever is less. The current loan rate is seven-and-a-half percent. Food manufacturers that process Hawaii-grown agricultural products or that utilize Hawaii-grown agricultural products in the manufacturing process may borrow up to $500,000 for fixed assets and $300,00 for operating funds at the same rate for part-time farmers.
“This piece of legislation allows the department some flexibility to assist the new breed of farmers in Hawaii,” said James J. Nakatani, Chairperson of the Hawaii Board of Agriculture. “Also, by assisting food manufacturers, we open new avenues for agricultural products to be marketed out of the state.”
For more information and the various agricultural loans, please call the HDOA’s Agricultural Loan Division at 973-9460.