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Modernizing Ag-LINK to Better Serve Ohio Farmers – Ohio Ag Net

By Robert Sprague, Ohio Treasurer

Forty years of high inflation, an unprecedented supply chain crisis, record high energy prices – combine these nationwide economic challenges with yearly concerns over weather and commodity futures. raw materials, and Ohio’s agriculture industry faces obstacles at every turn. Now, to create the perfect storm, rising interest rates are rapidly increasing the cost of borrowing.

Since last year, I have met with farmers, cooperatives, financial institutions and other members of Ohio’s farming community to learn about the impact of inflation and other economic challenges. on their operations and results.

For more than three decades, our Ag-LINK program has helped farmers and agribusinesses reduce the cost of doing business by providing interest rate reductions on new or existing loans. Year after year, borrowers use the program to fund initial operating costs for feed, seed, fertilizer, fuel, equipment and other expenses. But despite Ag-LINK’s popularity and long track record of success, my travels made it clear to me that our office could do much more to meet the borrowing needs of farmers.

That’s why we’ve reinvented Ag-LINK through a series of recent reforms to modernize the program and make it more accessible than ever.

In previous years, the Ag-LINK application period lasted only a few months at the beginning of each year. But now, for the first time ever, loan applications are being accepted year-round. The transition to a one-year application period provides borrowers with greater flexibility and ensures they can access capital when they need it most. This change also makes Ag-LINK more convenient for farmers and ranchers with varying borrowing needs throughout the year.

The current year is divided into four quarters, with new interest rate cut figures being announced at the start of each quarter to reflect real-time economic conditions. For the current quarter, Ag-LINK is offering a 0.5% interest rate reduction on agricultural business loans from eligible banks, credit unions and agricultural lenders.

As part of our recently passed Ohio Gains legislation, the Treasurer’s Office has updated its investment strategies to generate new cost savings opportunities for the farming community. We’ve revamped Ag-LINK to make it more convenient to use, while ensuring the program stays in step with the ever-changing borrowing needs of today’s agriculture industry. In short, we’re helping Ohio farmers save more money despite the economic pressure being felt nationwide.

The legislation includes the addition of agricultural cooperatives as eligible borrowers under Ag-LINK. Cooperatives face many of the same challenges as other farmers and agribusinesses that are already served by Ag-LINK. Opening the program to co-ops further recognizes their valuable contributions to Ohio’s economy and agriculture industry.

Additionally, we removed outdated caps on loan size, allowing the program to keep pace with modern borrowing needs. Going forward, loan limits will be assessed and set by our office on an annual basis.

As farmers across the state have told us, lower borrowing costs can mean the difference between being in the black or being in the red. With rising interest rates, the rate reduction offered by Ag-LINK becomes even more significant – and we have already seen the proof of this in action.

I’m proud to say that we’ve seen a strong response to these improvements, resulting in a dramatic increase in Ag-LINK participation so far this year. Just halfway through the second quarter of the year-long application cycle, the Treasurer’s Office is already poised to support 1,163 agricultural business loans in 59 counties for a total of more than $252 million, or nearly four times the total amount of loans financed last year. With the current minimum loan discount of 0.50%, Ag-LINK will save borrowers at least $1.26 million.

Through these reforms, we are cutting red tape and taking Ag-LINK to the next level. We’re proud to support the Ohio farming community, and with these modernization efforts, Ag-LINK is ready to serve the next generation of Buckeye State farmers.

If you are interested in participating in Ag-LINK, we encourage you to contact your financial institution to begin the online application process.

For more information, please visit our website at www.ohiotreasurer.gov/Ag-LINK.