State Launches $1M Loan Fund to Aid Farmers Affected by Drought

The Recorder, September 7, 2016, by Katie Lannan

Up to $1 million in micro-loans will now be available to Massachusetts farmers struggling under the impacts of a widespread and historic drought.

The launch of the Drought Emergency Loan Fund, announced Wednesday, is one of a series of steps Gov. Charlie Baker and his administration are taking in response to five months of abnormally dry weather.

Comparing it to a similar effort that made loans available to assist businesses after record snowfall in 2015, Baker said in a statement that the fund “will provide affordable working capital to small businesses grappling with the aftermath of extreme weather.”

Massachusetts has been under its own official drought declaration since July 1 and the arid conditions have been blamed for contributing to wild fires, an outbreak of gypsy moths, higher rates of ant infestation, smaller than usual apples, loss of crops, and an elevated population of mosquitoes carrying West Nile virus.

Loan amounts range from $5,000 to $10,000 and are available to Massachusetts-based family farms and “farm related businesses,” according to the application. Businesses “involved in real estate investment, multi-level marketing, adult entertainment or firearms” are ineligible.

The loan fund should provide relief to farmers and associated businesses that have been adversely affected by the historically dry summer, said Senate President Stanley Rosenberg, D-Amherst.

“Our family farms are the lifeblood of our locally sourced food and sustainable agriculture in our region. These loans will provide much needed relief to our farmers and related businesses who have sustained crop damage as the result of our unusually dry summer growing season,” Rosenberg said.

Massachusetts has been under a drought declaration since July 1 and currently 22.67 percent of the state is categorized under an “extreme drought” according to the U.S. National Drought Monitor.

The new drought loan program is anticipated to run through November. The Massachusetts Growth Capital Corporation will be responsible for funding the loan, managing the loan portfolio and collecting interest and principal payments.

State officials first announced plans to create an emergency loan fund at an Aug. 18 press conference at North Andover’s Smolak Farms, where owner Michael Smolak said his strawberry plants and Christmas tree seedlings were suffering under the dry conditions.

Smolak said this year’s drought was “as bad as I’ve ever seen it, and I was born in 1952, so I’ve been around for a few years.”

As of Aug. 19, Massachusetts farmers had lost nearly $14 million in crops due to the drought. The U.S. Department of Agriculture Farm Service Agency’s state emergency board has submitted a request for disaster declaration for some Massachusetts counties, which would make federal assistance available.

Farmers in Essex, Franklin, Middlesex and Worcester counties qualify for federal aid by virtue of a USDA disaster declaration in the New Hampshire counties they border.

The Massachusetts Drought Management Task Force meets Thursday morning and plans to get updates on conditions around the state and consider changing the drought level classification for some parts of the state.

Recorder Staff Writer Richie Davis contributed reporting.