The Redwood gazette. [volume] (Redwood Falls, Minn.) 1873-1940, 1934-01-11
Bovee Explains Workings o
New Plan to Aid Farmer
With Short Term Credit

An explanation of production credit
associations, one of which will soon
be operating in Redwood Falls, is re-
leased through the office Of Nate H.
Bovee, county agent. Directors for
an association to serve Redwood and
parts of Renville and Yellow Medi-
cine counties were named at a meet
ing here recently and a charter is eX-
pected soon.
The explanation follows:
In each land bank district produc-
ton credit will be made available
through local production credit asso-
Citations. They will make loans for
general agricultural purposes, includ-
ing the producing and harvesting of
crops; breeding, raising and fatten-
ing of livestock; production of poul-
try and livestock products.
Production Credit Association:-A
production credit association is an
organization of farmer borrowers
serving a local territory, generally
consisting of several counties. 1t is
cooperative in nature. By endorsing
farmers notes and discounting them
with the Federal intermediate credit
bank in the district, the association
obtains money to lend for agricultur-
al production purposes.
A production credit association is
assisted in its work and supervised by
the production credit corporation in
the district. The corporation also
helps to organize associations and
provides most of their capital. With
the consent of the corporation, 10 or
more farmers eligible to borrow may
organize so that the entire territory
and the various lines of agricultural
and livestock production to be fAanc-
ed through the association will be re-
presented. In organizing an associa-
ton, interested farmers should apply
for information to the production
credit corporation of their district.
How Loans Are Obtained:-Bor-
rowers offer acceptable security to,
buy voting stock in and become mem
bers of a local production credit as
sociation. Each borrower must own
stock in the association of value to
about five per cent of the money bor-
rowed. Regardless of the amount a
borrower owns, this stock entities
him to one vote at association meet
ings. 1t carries no double liability.
Size of Loans:-A loan to any one
farmer may not exceed 20 per cent
of the capital and guaranty fund OF
the association unless the collateral
is approved by the production credit
corporation. With such approval of
the collateral, loan may be made in
an amount not exceeding so per cent
of the combined capital and guaranty
fund of the association. No loans for
less than $50 can be made.
me:-Almost all loans are made
with maturities not exceeding one
year. The maturity of loan will
approximate the marketing period of
the crop or livestock financed by the
loan.
Security:-Primary security must
NC d. ilISG luOICSdSC llSA VII PSAS-oAie~a
property, such as livestock, imple-
ments and crops.
Cost:-Interest rates on loans
vary, but cannot exceed by more than
per cent the rate charged by the
federal intermediate credit bank OF
the district on loans made to the as
ISOLATION. At present the rate charg-
ed by the Federal intermediate credit
banks vary from three to three and
oneIhaf per cent, making the interest
rate charged the farmer vary from
six to six and one-half per cent. Bor-
rover pays reasonable inspection
charge and all fees for title search
and recording.
Where to neutrality-suspicious. for
loans should be made to the local
production credit association. If an
association is not serving the area,
write to the production credit corpor-
alton in the district for information
on how an association may be organ
lied.