Agriculture Secretary Ed Schafer met with livestock, dairy, and feed grain organizations on Monday to explain how some rural businesses – including both ethanol plants and livestock industries – may be eligible for the USDA’s Business and Industry Loan Guarantee Program.
“We walked through the B&I loan guarantee program, which has been used by their memberships, and we assured them that this was a long-standing program that we would use to help finance businesses in rural America, some of them may be ethanol facilities,” Schafer said. “We assured them that no specific money was being set aside only for the ethanol industry.”
Schafer understands why the livestock industry might have been concerned about stories that came out after comments he made to reporters at the World Food Prize symposium.
“It’s one of those situations where everybody is nervous out there, a lot of these folks have seen increased feed costs,” Schafer said. “There’s been a big effort by others to blame ethanol for increased feed and food costs and certainly ethanol production has been a small portion of that but it’s easy to kick around the new kid on the block and so we attack ethanol.”
He says there was a misunderstanding among some that the government was going to use part of the $700 billion bail out package to help ethanol plants that lost money this year by speculating on the commodity markets. But, Schafer said it was important for the livestock industry to know that the loan program is there for them as well. “And we’re going to pass along the elements of the Business and Industry loan guarantee program to them that they can pass out to their members.”
The program was established in 1974 to help local rural business by backing loans from private lenders for up to $25 million for credit-worthy entities. Loans are only given after due diligence is performed and the USDA has reviewed the businesses cash flow, management and other issues.