By MITCH LIES

Capital Press

SALEM -- A House committee has moved a bill to assist small and beginning farmers in land and equipment acquisition.

Known as the "aggie bonds" bill after a federal program by the same name, House Bill 2700 allows private lenders to earn federal tax-exempt interest on loans to eligible farmers.

The bill is designed to encourage lenders to provide loans to small farmers, potentially at lower interest rates, according to Ivan Maluski, policy director for Friends of Family Farmers.

In an earlier hearing, farmers testified that private lenders are hesitant to provide loans to small farmers.

"There are lots of farmers who have challenges getting lending," said Rep. Brian Clem, D-Salem, a sponsor of the bill.

"Traditional lenders who don't do any kind of ag lending eyeball them very warily, not knowing how to process agricultural risk," Clem said.

Farms that are less than 30 percent of the median size of farms in their county are classified as small under the bill.

The House Agriculture and Natural Resources Committee on April 9 unanimously moved the bill to the House floor with a do-pass recommendation, with a subsequent referral the joint Ways and Means Committee, where it will compete with other programs for state funding.

"The goal is to get this to a cost-recovery basis," where fees charged applicants will pay program costs, Clem said.

"The real question for Ways and Means" is whether to put some seed money in to get the program going, Clem said.

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