Michigan lawmakers approve $15M for farm disaster loans

Beth LeBlanc
The Detroit News
Farmer Dave Williams stands among the 2,300 acres of soybeans on his farm in Elsie, July 9, 2018. By June 9, only 43% of soybeans had been planted, according to U.S. Department of Agriculture crop progress reports.

Lansing — The Michigan Legislature approved Thursday a mid-year spending bill that would pump $15 million into a state disaster loan program for farmers struggling to plant crops amid continual rain.

The 34-1 Senate vote and 99-6 House approval votes came one day after Gov. Gretchen Whitmer asked U.S. Agriculture Secretary Sonny Perdue for a federal disaster designation that would give farmers additional flexibility to access crop insurance and relief funding approved earlier this month by President Donald Trump.

Perdue granted some flexibility Thursday when he announced Michigan farmers could harvest or graze cover crops on prevented plant acres in September and some counties could have extensions to the reporting deadline for prevented planting acres. 

Whitmer is expected to sign the supplemental state spending bill after working with lawmakers to ensure the funding will “sync up” with any forthcoming federal aid, said budget spokesman Kurt Weiss.

In Michigan, where corn contributes roughly $1 billion to the economy and covers more of Michigan than any other crop, farmers had planted about 63% of their planned corn crops by June 12, the Michigan Farm Bureau said. 

The stretch from May 2018 to May of this year was the third wettest on record, with roughly 38 inches of rain in that time period, according to Whitmer's office.

Under the relief plan, the state will move $15 million from its General Fund into an agricultural disaster program that provides low-interest loans to farmers who lose crops. The $15 million allocation would facilitate 1% interest loans between private lenders and farmers, growers or processers by paying the lender's loan origination costs and lowering interest rates.

"This really creates relief for farmers right away," said state Rep. Mark Huizenga, R-Walker. "It's our job to help farmers in this time of real crisis."

The program was used in 2012, when lawmakers allocated $15 million to assist the fruit tree industry after an early spring followed by freezing temperatures decimated Northern Michigan's cherry crop. 

“This low-interest loan program will give farmers affected by the wet spring an important option for bridging the loss of revenue they will experience this year,” said Sen. Dan Lauwers, a Brockway Township Republican. “Not planting a crop is like running a store or factory with no product — you have all the expenses with nothing to sell.”

Lauwers, who founded and led Eastern Michigan Grain from 1993 through 2013, was one of six lawmakers — four representatives and two senators — who abstained from voting Thursday due to potential conflicts of interest.

The loan program allows a qualified financial institution to make loans with a 1% interest rate and requires the state to pay the institution's administrative costs for that loan. The loan cannot be for more than $3 million and must be paid within five years. 

Shortly before Perdue's announcement Thursday, more than 60 state lawmakers also had urged the U.S. Agriculture secretary for increased flexibility related to federal crop insurance rules so farmers could utilize land normally not available for planting per the insurance rules. 

Record rainfalls, fluctuating commodity prices and the "implications of national trade policies" have challenged Michigan farmers this year, said Rep. Julie Alexander, R-Hanover. 

“Without assistance, the stories of family farms being sold will continue to rise and the increased rural mental health and opioid issues triggered by stress will continue to change to the makeup of our farm communities," said Alexander, chairwoman for the House Committee on Agriculture. 


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