A recent disaster declaration from the USDA has opened the door for farmers and ranchers to apply for low interest loans from the federal government. Texas A&M Agrilife Extension Economist Stan Bevers says growers need to be wary about getting further into debt.
Bevers said, "Some producers may decide, even at a low interest loan, I can't afford to take on more debt, I'm going to have to make other arrangements. In some cases those other arrangements are figuring out how to exit the business." He said if growers aren't frugal with their spending, taking out another loan could lead to further debt.
Larry Brown, General Manager of the Vernon COOP said the loans aren't being seen as a final solution. He said, "They're all aware of it and there's no really reaction to me as far as what some of them are going to do."
Bevers said if you already have a loan out you should consult with your lender before applying for another. He said, "Every producer needs to evaluate his own situation and see if it fits."