Anew loan guidance has been released by the US agriculture officials. It will help the hemp producers secure guaranteed loans as well as ensure the legalization of the product via U.S. Department of Agriculture’s Farm Service Agency.
A guidance notice was issued the previous month. It said,“While it’s understood that this new commodity will likely produce some servicing challenges because of state and federal regulations, it should be treated as closely as possible to any other agricultural commodity and serviced in the same manner,” stated the guidance notice”.
In the meanwhile, with USDA’s release of this rule, the FSA had extendedeligibility for farm loans to the hemp producers last fall. This prompted the new notice to provide further details for the lenders.
The new document illustrates the following legal parameters that help grant farm loans to the hemp producers:
- How to license under the USDA, state or tribal plan approved by the USDA or the 2014 pilot program.
- Planned area of land, in acres, as reported post spring planting.
- Producers must possess a contract to prove that they have adequate resources to pay the loans. Yet, they are entitled to receive loans without the contract, if they can show a proof of license and have access to adequate cash flow, barring the hemp income.
- The operating plan of a farm is relative to its performance history as well as contemporary conditions and local practices. It is reasonable to review these plans to show their production information as well.
- Availability and authorization of financial transactions by banking institutions.
The guidance has noticed that, presently, not many banks are working with the hemp farms or businesses.
As specified by the guidance, crops that test above 0.3%THC will not be destroyed by the agency.