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Swenson also noted that local food production still makes up a very small percentage of the U.S. agriculture industry, despite its recent growth. Swenson said the loan program is a positive first step, but the prospects of local food being a viable economic engine for most regions is highly limited. "This is a policy area where community affection and political affection for the idea of local foods has gotten itself way out in front of the economics," Swenson said. Rick Hartmann of Small Potatoes Farm in Minburn, in central Iowa, said the program needs to be balanced with farming education and good business planning. "Access to capital is going to be very important for young and beginning farmers, as long as it's tempered with other support," he said. "That's what's going to make that capital return an investment back to the lender and to the lendee in the long run." Vilsack announced the program a day after speaking at the American Farm Bureau Federation's annual meeting in Nashville. Since 2009, the federal government has increased the number of loans to beginning farmers and ranchers from 11,000 loans in 2008 to 15,000 loans in 2011. The interest rate for the new loan program changes monthly, and is currently 1.25 percent, according to the USDA, and the loan does not have to be repaid for seven years.
Karen Archipley of Archi's Acres in San Diego said she and her husband, Colin, an Iraq vet and former Marine Corps sergeant, run a program on their three-acre organic, hydroponic farm that teaches returning veterans how to be farmers and marketers of their own produce. She said they were recently contacted by one of the country's largest distributors of organic kale about buying a large quantity. They have three new farmers who want to supply the contract, but they lacked the capital. "I'm so excited to hear about this because it impacts us directly," Karen Archipley said. "We have some farmers working to get capital and they only needed $35,000 to set up crop production for organic kale."
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