Kansas 



Kansas established a linked deposit program in 

 1985. The program makes available $15 million that may 

 be deposited in banks at a fixed rate of 7.88%. Loans 

 to farmers may not exceed 2.5% above the cost of the 

 state's deposit. Loans are capped at $50,000 and may be 

 used to provide operating funds, refinancing of existing 

 debts, and new purchases. To qualify for a loan, 

 farmers must receive at least 70% of their annual gross 

 income from farming and have annual interest costs that 

 exceed 25% of total annual expenses. There is no 

 debt-to-asset requirement. The program has provided 365 

 loans, totaling $15 million. The program was scheduled 

 to terminate after one year. 



Michigan 



Michigan recently established a loan linked deposit 

 program that is administered by the Departments of 

 Commerce and Treasury. The program is authorized $139 

 million from the common cash fund for use in purchasing 

 certificates of deposit from banks at 2% below the 

 90-day U.S. Treasury bill rate. Banks may charge 

 interest rates to farmers not exceeding 5% above the 

 rate paid on the state's deposit. Loans may be used for 

 debt refinancing, operating expenses, or equipment 

 purchases. Loans are capped at $100,000. No 

 debt-to-asset ratio eligibility requirement exists under 

 the program. Michigan has committed $131.8 million 

 under the program. tn-^-^-'v* * 



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