Schumer targets flood aid loan rates for farmers

| 15 Feb 2012 | 09:22

    ALBANY — U.S. Sen. Charles Schumer last week called for the federal government to eliminate the interest farmers are scheduled to be charged on flood recovery loans after severe storms hit the Eastern Seaboard. The current rate is 3.75 percent for farmers affected by flooding and other damage from Hurricane Irene and Tropical Storm Lee, which hit a large section of farmland hundreds of miles inland. Schumer has asked the U.S. Department of Agriculture to make the administrative change as farmers face millions of dollars in losses from lost livestock and damaged crops, equipment and barns. The USDA didn't immediately comment. "The biggest banks pay almost no interest on their loans every day, forcing farmers to pay a higher interest rate when they have just been walloped by back-to-back storms is flat-out unfair," Schumer said. "We shouldn't make it more expensive for our farmers to recover from a storm than to operate when things are going smoothly." In some of the hardest-hit rural areas of New York, several residents said they needed grants or no-interest loans to recover after a recession already sapped much of their savings and equity. In New York alone, state officials estimate the agriculture damage from the storms at more than $45 million. Gov. Andrew Cuomo recently announced that the state will provide $15 million to help farmers and their communities recover. USDA farm service loans are available for emergency recovery from floods and other natural disasters, covering replacement of equipment, production costs, living expenses and payments on debt delayed by the disaster. Under the program, farmers can borrow to cover the full loss up to $500,000 to be paid over one to seven years. The hardest hit could get a 20-year loan. Farmers must apply within eight months of the disaster, Schumer said.