The Oklahoma State Legislature and Governor Keating approved legislation F.Y. 2000 to establish the Agricultural Enhancement and Diversification Advisory Board. $150,000 was initially allocated to fund the program. The purpose of the funding and the advisory board is to provide zero interest loans and grants to encourage agricultural business ventures and alternative agricultural enterprises.
Funds may be used for startup cost of new and expanding agricultural business ventures. Appropriate cost would include product and packaging development, feasibility studies, business plans, legal expenses, consultants, advertising and other marketing cost. Farm Diversified Grants may be used to experiment and demonstrate alternative agricultural crop and livestock practices.
Applications are received on a quarterly basis which are evaluated on the likelihood of success and adherence to program guidelines.
Oklahoma agricultural producers may claim an income tax credit for their direct investment in an Oklahoma producer owned agricultural processing entity which is designed to develop and enhance the production, processing, handling, and marketing of Oklahoma agricultural commodities. The types of entities in which direct investments can be made shall be limited to Oklahoma producer-owned agricultural processing cooperatives, Oklahoma producer-owned agricultural processing ventures, and Oklahoma producer-owned agricultural processing marketing associations. Further description of these entities can be found at 68 O.S. 2357.25(G).
Effective for direct investments made on or after January 1, 1997 but before December 31, 1998, the credit shall be thirty percent (30%) of the direct investment made in a qualified entity. Effective for direct investments made on or after January 1, 1999, if the total credit allowed for direct investment in Oklahoma producer-owned agricultural processing entities results in the reduction of total Oklahoma income tax of more than one million dollars (1,000,000) in any previous calendar year, the Oklahoma Tax Commission shall adjust the percentage of the credit for direct investment using the following formula.
Thirty percent times one million dollars divided by the credits claimed in the preceding calendar years.
In no event will the credit percentage exceed thirty percent (30%).
This credit will be available for the tax year in which the direct investment is made. In the event the credit exceeds the amount of income tax due, any unused credit may be carried forward against any subsequent income tax liability for a period not to exceed six (6) years. In the event of credits being carried forward, the amount of credit, once established, shall not be reduced in the event of credit percentage reduction in subsequent years.
An agricultural producer may work with a commercial lender (banker) and the Oklahoma State Treasurer's office to reduce interest rates on existing or new farm loans. The AgLink Deposit loan is a two-year program but may be renewed up to five times.
This is a two-part program. At risk farmers may be eligible for reduced interest (approximately 3% discount) on loans up to $350,000. These farmers are experiencing a debt to asset ratio of at least 55%. The link deposit loan for an at-risk farm or ranch business must be used for the purpose of operating the business or refinancing loans made to operate the business.
Farmers planning to diversify with an alternative agricultural enterprise may also apply and receive a reduced interest rate on a loan up to $1,000,000. The loan will be used to expand or start the production, processing or marketing of an alternative agricultural product. The following list identifies those alternative agricultural enterprises that qualify for an AgLink Deposit Loan:
Aquaculture Products Nursery Stock
Bait Farming Pecans
Certified Organic Products Recreational Farm Enterprises
Christmas Trees Safflower
Cut Flowers for fresh and dried markets Seed Production: native and improved grasses
Deer Farming Seed Production: Alfalfa, Barley, Rye, Oats, and
Fruits, small Sesame
Fruits, tree Sheep
Goats Shooting Preserves
Greenhouse: Vegetables Sod Production
Greenhouse: Ornamentals Spices
Hardwood Processing Sunflowers
Mungbeans Wildflower Seed
Mushrooms Wildlife Leases (including hunting and fishing)
If you are interested in starting a career in agriculture, the Oklahoma Beginning Farmer Loan Program may offer the financial help you need. The program is administered by the Oklahoma Development Finance Authority and provides low cost financing. Loans are provided by participating lending institutions and are financed by the sale of federally tax exempt bonds. Beginning Farmer Loans typically incur interest rates below conventional rates.
Qualified borrowers may seek up to $250,000 for the purchase of land, farm buildings, machinery, equipment and livestock. Eligible farmers must never have held a direct or indirect ownership interest in substantial farmland (30% of the median farm size in the county). They must have a net worth of less than $200,000 and have access to adequate working capital.
FOR FURTHER INFORMATION ON ANY OF THE ABOVE PROGRAMS PLEASE CONTACT "GARY BLEDSOE" AT THE OKLAHOMA DEPARTMENT OF AGRICULTURE. PHONE NUMBER: 1-405-522-5515.
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