Michigan Corn Field

A corn field in Shiawassee County in a photo taken Nov. 27. Standing water and mud are making it difficult for farmers to harvest soy bean and corn crops this fall. 

The Michigan House of Representatives is taking up a bipartisan measure to assist the state's farmers.

Senate Bill 693 was introduced in December. It passed the Senate last week.

The bill aims to offer low-interest loans to qualified farmers who experienced losses due to the extreme weather in 2018 and 2019. The bill would update the state’s existing Agricultural Disaster Loan Origination Program, passed in June 2019. The ADLOP set aside $15 million for disaster relief, which also provided access to $300 million in loans.

Michigan farmers were hit hard by weather events in 2019. According to the U.S. Department of Agriculture, approximately 920,000 acres in the state were determined unfit for planting and 77 counties filed for one or more disaster designations last year.

The state was subjected to 37.9 inches of precipitation between May 1, 2018 and April 30, 2019.

One of the bill’s sponsors, Sen. Dan Lauwers, R-Brockway Twp., abstained from voting on the bill, claiming a conflict of interest due to the fact he is a farmer by trade.

“Last spring and fall, farms across the state suffered tremendous losses due to unpredictable weather,” Sen. Majority Leader Mike Shirkey said in a statement. “The agricultural industry is a vital part of Michigan’s economy, and it’s important we do everything we can to support our local farmers.”

SB 693 would establish a partnership between the state, private lenders and farmers, allowing farmers the ability to take out loans to cover 2020 expenses. The length of the loans would be changed from the current five years to seven years.

The first principle payment would not be due for 24 months after any loan origination. The bill would also update the interest rate to the five-year U.S. Treasury Note rate plus 2 percent.

“The program is a partnership between farmers and processors, private lenders, and the state to support the agriculture industry through loss of crops due to weather-related disasters,” Shirkey said.

“Updating this program will give farmers the peace of mind that they can take out a loan based on their qualified losses to cover their everyday expenses – including machinery, land and infrastructure payments – rather than sell the family farm,” Shirkey said.

“The bill would have no fiscal impact on state or local government,” according to the House Fiscal Agency analysis. “The program received a $15.0 million appropriation in 2019 PA 45 and, to date, no funds have been spent. The funds are currently considered work project appropriations and are available for expenditure through September 30, 2023.”

“Farm Bureau supports SB 693 as a means to assist farmers dealing with the weather disaster they experienced in 2019,” Michigan Farm Bureau Legislative Counsel Rebecca Park said in an email to The Center Square.

Regional Editor

Bruce Walker is a regional editor at The Center Square. He previously worked as editor at the Mackinac Center for Public Policy’s MichiganScience magazine and The Heartland Institute’s InfoTech & Telecom News.