Proposed DNR Rule Makes Financing Deep-Bedded Buildings Attractive
By Karen Grimes, DNR
Low interest loans for deep-bedded buildings are likely to be available to livestock producers sometime in October as the result of a new rule approved by the Iowa Environmental Protection Commission on Aug. 7.
Only small and mid-size facilities that will total less than 1,000 animal units are eligible because of federal funding sources that limit the loans to facilities that are not concentrated animal feeding operations (CAFOs). The 1,000 animal units are equivalent to 1,000 beef cattle or 700 mature dairy cows.
Although the rules are not yet final, they would allow loans of up to three percent interest to be used for deep-bedded buildings that:
1) replace an existing open feedlot, or
2) expand a facility as an addition to an existing open feedlot, provided the existing open feedlot remains in compliance with all environmental rules.
Producers often spend about $400 to 500 per head on converting to this type of building, so the low interest loan is an attractive option. The loan can be financed for more than 90 percent of the cost. Or, a loan can be used for eligible expenses in addition to items cost-shared through the federal Environmental Quality Incentives Program (EQIP). Total funding cannot exceed 100 percent. Producers have 20 years to pay back the loan.
Funding is available for the buildings because they confine the animals and manure, preventing the possibility of runoff or discharge of the manure. The loans cannot be used for some of the minor costs of the project, such as feed bunks or watering facilities, that don’t have a direct benefit to the environment or Iowa’s water quality.
Producers may apply for loans through many local lenders. Applications and more information about the program are available on the DNR Web site at www.iowasrf.com. Click on Livestock Water Quality Facilities. Or, contact Patti Cale-Finnegan, DNR State Revolving Fund Coordinator, at (515) 725-0498 or email@example.com.
The loans are available through the Livestock Water Quality (LWQ) Facilities program, part of the Clean Water State Revolving Fund (SRF). This ongoing program has provided nearly $3 million to finance eligible manure management structures, equipment and plans.
Federal rules limit the use of SRF loans to publicly owned point sources, such as municipal wastewater treatment facilities. Non-CAFO livestock operations are eligible because they are considered non-point sources. Their nonpoint source status also allows a simple financing system without many of the other federal requirements affecting point source loans.