Pennsylvania's Agriculture-Linked Investment Program Overview
The Agriculture-Linked Investment Program (AgriLink Program) in Pennsylvania offers low-interest loans up to $25 million to assist farmers in implementing best management practices. The program provides benefits like a subsidized interest rate reduction for construction projects and is funded through support funds provided in Act 37 of 2019. The Treasury coordinates with lenders to establish linked deposits to support farmers who adopt new BMPs.
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Agriculture-Linked Investment Program A low-interest loan program for Pennsylvania's Agricultural Community Presented by : Pennsylvania State Treasury - Tammy Bianchi Pennsylvania State Conservation Commission- Eric Cromer AUGUST 2022
AgriLink Program WHAT IS THE AGRILINK PROGRAM? The Agriculture-Linked Investment Program (AgriLink Program) provides up to $25 million in low-interest loans to assist farmers in implementation of best management practices listed in a: Act 38 nutrient management plan, Chapter 91 manure management plan, Agricultural Erosion and Sedimentation plan (Ag E&S), or Conservation plan. o
AgriLink Program - Benefits What does the program provide for the farmer? o The State Conservation Commission has authorized a subsidized 3% rate reduction on a loan for the construction of eligible best management practices (BMP). o The maximum size of the Agri-Link loan is $250,000 for individual projects. o Maximum loan term is 12 years and must be structured as a construction loan. o The AgriLink Program is intended to supplement the portfolio of loan programs that are available at eligible lending institutions.
AgriLink Program Program Funding HOW IS THE PROGRAM FUNDED? o The State Conservation Commission (SCC)utilizes support funds provided in Act 37 of 2019 to subsidize an interest rate reduction for a block of AgriLink loans available for farmers who implement a new BMP. That subsidy may change periodically (annually or biannually) if additional support funds are allocated to the program. The subsidy rate applied to a farmer s loan will not change during the term of the loan. o Treasury will allocate a portion of investment funds in an amount equal to the SCC block of AgriLink loans. Treasury will coordinate with the Lender to establish a linked deposit in an amount equal to the loan and with the established rate reduction.
AgriLink Program Treasury AgriLink Deposit How does the subsidy get to the Lender? Approved Depository: o The Treasury will coordinate the placement of a collateralized deposit at a reduced rate The amount deposited will be equal to the loan or $250,000, The Time Deposit Program rate in effect at the date of deposit will be reduced by the approved rate reduction. Interest will be calculated using the net rate. o Interest and principal paydowns will be due semi-annually, 10 days following the end of the anniversary month. Ex. Original deposit in September, March is anniversary, interest and paydown due April 10th. o The interest rate will be reset using the Time Deposit Rate in effect on anniversary. Farm Credit Service Semi-annually, the subsidy rate will be applied to the average daily balance of all outstanding AgriLink loans and that amount will be remitted per the agreement. o
AgriLink Program Program Funding Current Program Tems - o The current SCC approved size is $2.5 million of total loan principal o The approved rate reduction is 3% on the current market rate on a loan issued by the lender. For example, if a borrower would ordinarily qualify for a loan at 5.5% interest rate, the interest rate through the AgriLink Program would be 2.5%. The interest rate terms may be a fixed or variable rate with the 3% reduction applied consistently to the base rate.
AgriLink Program Lender Participation Where can a farmer obtain an AgriLink loan? o The LENDER, must be an approved state depository or an office of the Farm Credit Service If the financial institution is not an approved state depository, please contact the Pa Treasury at DEPOSITORY@PATREASURY.GOV to request an application or with questions. o The LENDER must enter into agreement with Treasury Agriculture- Linked Investment Program Agreement (Lender Agreement) The Lender Agreement establishes the terms and conditions between Treasury and the lending institution for an AgriLink loan. o
AgriLink Program Lender Notes Agri-Link loan o Participating lenders retain the right to evaluate all loan applications according to their usual lending standards and offer a loan without consideration of AgriLink Program support. o The participation of the Lender in the AgriLink Program is subject to the terms of the Lender Agreement and SCC approval of the AgriLink Program submission. o The Lender Agreement will cover all AgriLink loans at the institution and may be executed as a preliminary step in the process. The Agreement is effective upon the approval of all AgriLink project documentation and award of an AgriLink Loan by the SCC. o The AgriLink Program is intended to offer a low-interest loan alternative if a conventional loan is not practical for the farmer. o AgriLink Loans will only be awarded if sufficient support funds are available.
AgriLink Program Lender Role What gets submitted for an AgrilLink? o The Lender is required to create a submission packet of all documents for an AgriLink consisting of: An approved loan application, An executed AgriLink Lender Agreement and/or an AgriLink Inventory Report detailing all approved AgriLink Loans by the Lender (PA Treasury form). And the Farmer supplied: Borrower Assurance of Eligibility and Verification, Statement of Concurrence of Project Costs, Borrower Affidavit and Assurance of Use of Funds,
AgriLink Lender Role COMPLETED REQUEST SUBMISSION: Please email the complete submission packet to the following addresses: State Conservation Commission: RA-AGAGRILINKPROGSCC@pa.gov and Pennsylvania Treasury, Bureau of Cash Management and Investments: DEPOSITORY@PATREASURY.GOV
AgriLink Program Conservation District Role o For conservation districts engaged in delegation of the Act 38 Nutrient Management and Chapter 91 Manure Management programs, the conservation district is asked to: Function as a distribution center of information on the AgriLink low- interest loan Program. Provide technical assistance to a farmer in verification of program eligibility or project cost verification for their project loan.
AgriLink Program Conservation District Role Please provide the following to an interested farmer: o Copy of the current program brochure or fact sheet, AgriLink Program Pre-loan Application Checklist List of eligible lenders Approved Depositories and Farm Credit Service offices. List of Eligible Best Management Practices Blank copy of the Borrower Assurance of Eligibility and Verification form Blank copy of the Statement of Concurrence of Project Costs form Blank copy of Borrower Affidavit and Assurance of Use of Funds form The conservation district is requested to assist interested farmers in completion of any of these required forms that must be submitted with a loan application at a participating lender. o
AgriLink Program Conservation District Role Borrower Eligibility Borrower Eligibility o The farmer (borrower) must provide the lender proof that a BMP project for which they are seeking a loan is identified for implementation in a nutrient management plan, manure management plan, Ag E&S plan or conservation plan for the agricultural operation. o Documented on the Borrower Assurance of Eligibility and Verification form - must be completed by the farmer and concurred in by the conservation district (signature required) (signature required). .
AgriLink Program Conservation District Role Statement of Project Costs Statement of Project Costs. The farmer (borrower) must provide proof that the construction costs of the project are reasonable. o Documented on the Statement of Concurrence of Project Costs which must be completed by the farmer and reviewed and concurred in by the conservation district (signature required). (signature required). o Note: It is not the intention of the program to evaluate the costs for the project in detail but, provide an assurance to the lender that the costs are reasonably accurate and thus reduce the opportunity for cost overruns. The conservation district is asked to review the cost information submitted by the farmer, in consultation with NRCS engineering or District Engineering staff and, document that the costs are true and reasonable (signature required). (signature required). o
AgriLink Program Conservation District Role Borrower s Use of Funds Borrower s Use of Funds. o The farmer (borrower) must also provide a listing of any other funds to be applied to the project and an assurance that the funds will be used only for the project on the loan application. o Combined funds from several sources must not exceed the actual cost of the project. o The farmer must complete the Borrower Affidavit and Assurance of the Use of Funds form, listing all other funding sources to be applied to the project (No conservation district signature is needed).
AgriLink Program - Eligibility WHO IS ELIGIBLE TO PARTICIPATE? Any person, individual, partnership, corporation or legal entity who has an interest in property in this Commonwealth, who engages in agricultural operation in this Commonwealth, who has legal and financial responsibility for the agricultural operation o WHAT PRACTICES ARE ELIGIBLE FOR FUNDING? Best Management Practices (BMPs) that are; Approved by the State Conservation Commission, Listed in an approved nutrient management plan, a manure management plan, an Ag E&S plan or other acceptable conservation plan, Effective and practical in managing nutrients and agriculture related stormwater issues. Structural or management oriented and designed and constructed to conform to the standards found in the Pennsylvania Technical Guide. o
AgriLink Program Farmer Participation HOW CAN A FARMER PARTICIPATE? o Review the Farmer Pre-loan Application Checklist (available on-line ) o Develop or have available one of the following plans. A current: Nutrient Management Plan that meet the requirements of Act 38 of 2005. Manure Management Plan that meets the requirements in Chapter 91 of the PA Clean Streams Law. Ag E&S Plan for all acres owned or operated that meets the requirements of Chapter 102.4(a) of the PA Clean Streams Law. A current USDA- NRCS Conservation Plan that meets the requirements of Chapter 102.4(a) of the PA Clean Streams Law. o Develop designs and costs estimates for the Best Management Practice (BMP) project
AgriLink Program Farmer Participation HOW CAN A FARMER PARTICIPATE? o Contact an approved lender or Farm Credit Service office participating in the AgriLink Program. o Complete a loan application at the selected bank or Farm Credit Service office. Note: there is not a separate Agri-Link Loan Program application. Lenders should use their standard loan application documents. o Attach the following forms to a loan application: Completed Borrower Assurance of Eligibility and Verification form signed by the conservation district. Completed Statement of Concurrence of Project Costs signed by the conservation district. Copy of the Borrower Affidavit and Assurance of Use of Funds signed by the farmer.
AgriLink Program BMP eligibility & verification o BMPs implemented using AgriLink Program must be: Practices that are acceptable to the SCC (Eligible BMP list available). Designed and constructed to the standards and specifications found in the Pennsylvania Technical Guide. o Where an NRCS or District Engineer has designed the project for other financial assistance programs, NRCS or a District Engineer should complete construction checks and final certification checks. Documentation that is used for other financial assistance programs may be used to meet the AgriLink Program verification requirements. A copy of the certification documentation and/or conformance certificate should be provided to the farmer to provide the lending institution.
AgriLink Program Process Summary Farmer (Borrower) o completes program forms verifying the project eligibility, costs of project, and use of funds o completes a loan application with a participating lender. Conservation District o assists the borrower with appropriate document reviews and verifications.
AgriLink Program Process Summary o Lender: enters into an Agriculture-linked Investment Agreement with Treasury reviews Borrower loan application using their usual lending standards submits an AgriLink submission package to the State Conservation Commission and Treasury. o SCC: reviews and approves the AgriLink loan package documents. o Treasury: places deposit and memorializes the AgriLink loan amount, interest rate and issue date with the Lender.
AgriLink Additional Resources Please visit the following websites for AgriLink Program information regarding available lenders, eligible projects and required forms: State Conservation Commission: https://www.agriculture.pa.gov/Plants_Land_Water/StateConservation Commission/Pages/default.aspx Telephone: 717-787-8821 (Borrower forms; Approved lenders; Eligible BMPs; Pre-loan Checklist; Step by Step Application Procedure) PA Treasury: https://www.patreasury.gov/ Telephone: 717-787-2912 (Lender Agreement; Loan Inventory Form; Collateralization Information; Approved Lenders; Step by Step Application Procedure)