The Farm Storage Facility Loan Program (FSFLP) is a vital financing initiative administered by the U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA).
Created to support American farmers and ranchers, the program offers low-interest loans to producers for the construction, purchase, or upgrade of storage facilities and equipment essential to post-harvest operations.
In a landscape where efficiency, preservation, and post-production quality directly impact profitability, FSFLP provides the financial muscle that producers need to improve infrastructure without draining working capital.
From grain bins and cold storage units to hay barns and refrigerated trucks, FSFLP ensures that perishable goods, grains, and commodities are stored properly and delivered with minimal loss.
The goal is simple yet profound: enhance storage capacity, reduce spoilage, and promote better market timing for farmers to sell their produce at favorable prices.
Especially important for small- and mid-sized farms, the FSFLP levels the playing field by making modern storage technology more accessible. With loan terms of up to 12 years, fixed low interest rates, and a streamlined application process, this program has become a cornerstone of agricultural infrastructure development in the U.S.
What Is the FSFLP and Why Does It Matter?
The FSFLP enables farmers to build or upgrade on-farm storage without resorting to high-interest private loans. This is critical because improper or insufficient storage leads to post-harvest losses, quality degradation, and lower market prices. When farmers can store grain, hay, vegetables, or fruits longer, they gain flexibility in choosing the right time and place to sell, rather than being forced to sell immediately after harvest at low prices.
For example, a wheat farmer who installs a grain bin under FSFLP can wait until market prices peak. Likewise, a produce farmer who builds a refrigerated storage unit can extend shelf life, reduce waste, and meet stricter retail and export standards.
FSFLP not only protects farmers’ incomes—it strengthens food security, boosts rural economies, and encourages technological upgrades in the agricultural sector.
Key Subtopics
1. Eligible Applicants
The program is open to a wide range of agricultural producers:
- Individuals or legal entities who produce and harvest eligible commodities
- Tenants, landlords, or sharecroppers (with legal interest in the crop)
- Members of cooperatives or tribal organizations
Applicants must demonstrate the ability to repay the loan, maintain the facility, and show need for the requested improvements. Beginning, socially disadvantaged, and veteran farmers may qualify for special terms or reduced down payments.
2. Eligible Commodities and Facilities
FSFLP covers a broad list of commodities and the facilities used to store, handle, or transport them. These include:
Commodities:
- Grains (corn, wheat, soybeans, etc.)
- Fruits and vegetables
- Hay, silage, and biomass
- Honey, hops, maple syrup
- Milk, butter, cheese (via cold storage)
Facilities and Equipment:
- Grain bins and silos
- Hay barns and bulk storage sheds
- Refrigerated trucks, coolers, and freezers
- Conveyors, augers, drying equipment
- Concrete foundations and fencing (as part of the project)
The loan can be used for both new construction and upgrades to existing structures.
3. Loan Terms and Limits
FSFLP offers attractive terms that make it financially feasible for small and large producers alike:
- Loan amount: Up to $500,000 per borrower (higher with approval)
- Loan terms: 3, 5, 7, 10, or 12 years, depending on the project
- Down payment: Typically 15% of the total project cost
- Interest rate: Fixed, and generally lower than market rates
- Security: Loans must be secured by a promissory note and possibly real estate or chattel liens
Special reduced rates or fee waivers may apply to qualifying disadvantaged or beginning farmers.
4. Application Process
The application process is relatively straightforward:
- Visit your local USDA FSA office
- Submit a completed application, including cost estimates, designs, and proof of land ownership or lease
- Undergo credit review and environmental compliance check
- Receive conditional approval before beginning construction or purchase
Loans are disbursed after construction or installation is completed, verified, and approved.
5. Economic and Operational Benefits
The FSFLP provides both immediate and long-term benefits:
- Reduces post-harvest losses due to spoilage, pests, or weather
- Improves market timing by letting producers store and sell when prices are favorable
- Increases operational efficiency with upgraded handling and transport equipment
- Strengthens rural communities through capital investment and job creation
- Encourages adoption of clean and sustainable storage practices
For producers of perishable goods like dairy or vegetables, cold storage expansion under FSFLP can open doors to new retail and export markets.
