By MITCH LIES

Capital Press

Teresa Retzlaff knows all too well the difficulty small farms encounter when trying to secure loans to purchase farmland.

For the better part of the past five years, Retzlaff and her husband, Packy Coleman, encountered one obstacle after another as they tried to get such a loan.

And, Retzlaff said, the problem isn't unique to them.

"I wish I could tell you this was a case unique to us," Retzlaff told the Interim House Agriculture Committee in December. "I have met with so many small farmers who run into the same problem trying to access loans."

Retzlaff hopes a bill in the 2013 Legislature makes it easier for her and future applicants to obtain loans.

House Bill 2700 directs the Oregon Business Development Department to develop a Beginning and Expanding Farmer Loan Program to assist beginning farmers with buying agricultural land and improving it.

The program is similar to "aggie bonds" programs in 16 other states.

Under the aggie bonds, lenders can earn federal tax exempt interest income on loans to beginning farmers and ranchers.

Retzlaff told the Interim House Agriculture Committee that her problems started in 2008 when she and her husband tried to purchase a small farm outside Astoria, Ore. The couple previously ran a small farm on leased land outside Seaside.

"At each bank, the loan officer was initially very pleased to speak with a small business owner about helping them purchase a new location for their small business," Retzlaff said. "Then I would introduce a certain 'F' word, and that word is, of course, farm. The conversation would stop dead and I would be very politely, but firmly, told that they don't do farm loans."

She told the panel the state "has an amazing opportunity right now."

"We have a generation of younger people who are very interested in agriculture," she said. "Individually, we may not seem like much, but collectively we are driving a tremendous industry of farmers' markets, of direct-to-market sales, of restaurants that are dependent on fresh local food. And our small farms spend a tremendous amount of money in the Oregon economy buying supplies."

But young farmers have a difficult time obtaining financing, she said.

"I think that a program like aggie bonds could really make a difference in getting more of those people onto land and keeping farming innovation happening in Oregon," Retzlaff said.

Among other sponsors, HB2700 is sponsored by Reps. Brian Clem, D-Salem; Sal Esquivel, R-Medford; and Peter Buckley, D-Ashland.