Intelligencer Journal / Lancaster New Era; May 8, 2012
by P.J. Reilly

The Next Generation Farmer Loan Program run in Lancaster and Chester counties over  the past 12 years will hit a milestone Wednesday.

One of four loans the Lancaster County commissioners are expected to consider for approval at their meeting Wednesday will be the 100th awarded to a first-time farm owner since the program was introduced here in 2000.

Exactly which farm hits the century mark depends on the order in which they are presented to the board.

“We are very pleased to be able to approve these loans for farmers who are taking the step to stay in agriculture, and to make production agriculture a way of life and build a family and have income from it,” Commissioner Dennis Stuckey said.

Under the program, banks are exempt from federal, state and county income taxes owed on the interest earned from loans made to first-time farm buyers.

That tax exemption allows banks to offer the loans to farmers at a reduced interest rate — usually about 20 percent to 30 percent below the bank’s normal rate, according to Lyle Hosler, project manager for EDC Finance Corp. of Lancaster, which administers the loan program in Lancaster County.

Chester County Industrial Development Authority oversees the program in Chester and Lancaster counties.

Farmers who never have owned farms exceeding 15 acres are eligible to participate in the program. The borrowers must be the sole owners and users of the farms, and $488,000 is the most they can seek in tax-exempt loans.

Before a loan can be granted to a Lancaster County farmer, the county commissioners must approve it, although the county is not liable for any part of the loan.

The commissioners will consider the following loans Wednesday:

  • Samuel J. and Sadie M. Beiler, $488,000, to buy a 72-acre dairy farm in East Lampeter Township they’ve been renting the past nine years.
  • Timothy R. Sauder and Frances E. Miller, $250,000, to buy a 60-acre farm in Eden Township to run a dairy for making Greek-style yogurt.
  • Eli K. and Miriam K. Stoltzfus, $395,000, to buy a 48-acre dairy farm in West Earl Township they’ve been renting since 1998.
  • Delton L. and Maria S. Nolt, $488,000, to buy a 164-acre farm in Fulton Township to run a dairy.

Assuming all four loans are approved, Lancaster County farmers will have secured 79 of the 100 loans issued through the local Next Generation Farmer Loan Program.

The others were granted to Chester County farmers.

The 79 loans were for a total of $26.1 million to buy Lancaster County farms covering about 5,700 acres.

“I think of farmers as the original small business people of the country, particularly here in Lancaster County,” Stuckey said. “This program is important because we keep farmers farming. It’s production agriculture. It is the Commonwealth’s largest industry.”

The state government sets a cap on the total amount in tax-exempt loans that can be issued in Pennsylvania each year.

This year the cap is $10 million, according to the state Department of Agriculture.
Historically, Lancaster County has chewed up the lion’s share of the annual limit.

In 2007, when the cap was set at $3 million, 12 Lancaster County farmers drew down the entire amount.

The program is particularly popular here among Plain Sect farmers, according to Hosler. Stuckey said that’s because the program involves a special loan rate provided by a bank, rather than a direct handout from the government.

“Anything we can do to help pass on the farming way of life to the next generation, I’m in favor of that,” he said.

© 2004-2012 Lancaster Newspapers