Giannoulias introduces "Cultivate Illinois"
Pledges $4 billion in ag loans over 4 years; Doubles loan amount per farm

April 25, 2007

Prior to helping a Williamsville farmer with his spring planting, State Treasurer Alexi Giannoulias today announced a new agricultural loan program that will make $4 billion available to farmers.

Through the new “Cultivate Illinois” loan program, the Treasurer’s Office will partner with local financial institutions to help farmers buy equipment, land and other necessities such as seed, fertilizer, plants and crop insurance.

“The costs associated with farming have risen dramatically in recent years,” said Giannoulias, who visited a Central Illinois farm and planted a round of corn. “We are increasing the state deposits to keep pace with those costs so Illinois farmers can stay competitive with other states.”

Giannoulias is pledging $1 billion in deposits each of the next four years, the largest amount ever to be earmarked by the Treasurer’s Office and more than any other state in the nation. In addition, he is doubling the amount available to farmers in the Cultivate Long-Term loan program.

The Cultivate Illinois loan program brings four existing types of financing known as “linked deposits” under one program umbrella and streamlines the application process. Cultivate Illinois includes:

• “Cultivate Annual” loans to farmers for typical operating expenses.
• “Cultivate Long-Term” loans to farmers who show need based on their net income during the past two years for large investments.
• "Cultivate Alternative" agriculture loans to fund enterprises like vineyards and
  "Pick Your Own" farms.
• "Storm and Drought" loans to farmers who are experiencing hardship due to drought, tornado or other weather-related damage.

“Farming plays a vital role in Illinois’ economy,” Giannoulias said. “The agriculture industry employs more than one million people and generates more than $9 billion annually. The Treasurer’s Office will do what ever it can to help farmers.”

Giannoulias increased the amount available through the Cultivate Long-Term loan program to $200,000, up from $100,000 offered since 1999. The uses of long-term loans include new and used farm equipment, construction and livestock. Also, for the first time, Treasurer’s Office staff will interview farmers and personally visit their farms so they can have intimate knowledge about the farmers’ Cultivate Long-Term loan requests.

“Farmers are more than just names on a piece of paper,” Giannoulias said. “We want to hear what their needs are so we can better serve them.”

Under the Cultivate Annual loan program, the maximum loan is $200,000 per farmer or $400,000 per farm operation. The Treasurer’s Office is considering the first increase since July 2001 and will announce changes after planting season.

Giannoulias unveiled Cultivate Illinois at the John Cooper farmstead outside of Williamsville. Cooper rents the farm to his son, Roger, and his son-in-law, Tom Foran, who farm a total of 1,800 acres of corn and soybeans in the region.

Roger Cooper has participated in the Treasurer’s annual operating loan program since 1992. His current interest rate was reduced 1.15 percent under the Cultivate Annual loan program, saving him a potential $2,300 this year.

“The linked deposit reduces my interest costs at a time when interest rates and input costs are going up,” Cooper said. “Anything you can do to reduce costs while expenses are going up is a good thing.”

Cooper finances with Farm Credit Services of Illinois, one of almost 1,000 banks and financial institutions that have partnered with the Illinois Treasurer’s Office to grant low-interest loans to farmers.

“The costs associated with farming – from farmland to crop inputs and energy – have risen significantly over the past several years,” said Dave Owens, Chief Financial Officer at Farm Credit Services of Illinois. “The program announced today is designed to address the higher cost of doing business and demonstrates the Treasurer’s commitment to helping farmers meet their financial needs. As a lender that focuses on agriculture, we are proud to partner with the Treasurer to offer this program to Illinois farmers.”

Total costs to produce corn for all combined areas of the state were $488 per acre in 2006, up 6.5 percent over the previous year, according to the University of Illinois Farm Business Management Handbook. Total cost per acre to produce soybeans increased from $351 per acre in 2005 to $375 per acre in 2006.

More than $750 million is currently invested in the Treasurer’s Office annual agricultural program, providing low-interest financing to more than 10,495 borrowers through participation with financial institutions and the Farm Credit Services.

More than $32.4 million is currently invested in the Treasurer’s Office long-term and alternative agricultural programs, providing low-interest financing to more than 2,058 borrowers through participation with financial institutions. The

Treasurer’s Office began backing annual agriculture loans in 1983. The alternative agriculture component started in 1999. The long-term program was added in 2000.

The Treasurer’s Office also backs low-interest loans to businesses that create jobs, non-profit organizations that improve their communities and Illinois residents.

Farmers who have any questions or need more information on Cultivate Illinois should email cultivateillinois@treasurer.state.il.us or call 217-557-6436. Applications are available at the Treasurer’s website, www.treasurer.il.gov.