ALBANY (June 30, 2010) Legislation co-sponsored by Senator Aubertine passed the Senate to increase the aggregate amount of linked deposit loans an eligible farm business may receive from $1 million to $2 million and extend the term of linked deposit from four to six years (S.5514).
â€œBy making more money available and extending the length of loans we are giving farmers greater financial incentives to reinvest in their business,â€ said Senator Darrel J. Aubertine. â€œThese capital improvements will increase productivity, cut energy costs and create and maintain jobs.â€
â€œThis bill will allow farmers to access much needed capital through the state’s Linked Deposit loan program. By increasing the Linked Deposit loan cap from $1 million to $2 million, farm operations will be better positioned to invest in needed farm infrastructure projects,” said Dean Norton, President of New York Farm Bureau.
The Linked Deposit Program has provided an important incentive for expansions on New York State farms. Under the program, eligible businesses can obtain loans at an interest rate that is generally 2 or 3 percentage points lower than the prevailing rate on such loans, thereby making borrowing less expensive.
The current program provides that link deposit loans shall be for four years. Most of the projects involved have a loan period considerably longer than four years. Lengthening the linked loan period to six years will allow more projects.
â€œThe expansion of incentives provided under the Linked Deposit program will help stimulate economic development projects on New York Farms,â€ said Senator Darrel J. Aubertine. â€œThe recent credit crunch in Agriculture has slowed growth and development on all New York farms and programs like this will help us regain a competitive edge.â€
According to Farm Credit East, one of the major farm lenders in New York State, at the end of 2009, over 99 projects with a value exceeding $27 million currently utilize the program.