WASHINGTON (B)--USDA is seeking to expand farm participation in its on-farm storage loan program by lowering the required down payment to 15%, from 25%, and allowing farmers to use USDA financing to build storage for silage, USDA Secretary Dan Glickman said.

On-farm storage bins are needed because off-farm storage has declined drastically since 1987 and this year's crop is expected to overfill nearly bulging grain bins across the United States, Glickman said.

Glickman described the loan program--which he announced earlier this year--as "one more risk management tool" that allows farmers to store grain until they can get a better price from the market.

"We hope that farmers realize that this is a great and valuable tool for them," Glickman said.

On-farm storage would also help farmers separate genetically-modified and regular crops, something the USDA secretary said was increasingly necessary as demand for "identity preserved" non-biotech crops increased.

In the four months since USDA made its first loan, Glickman said the department has approved loans worth $54 million to build over 1,800 bins and silos in 30 states, with most of the construction taking place in Iowa, Minnesota, North Dakota and Illinois.

The program provides seven-year, low-interest loans to farmers to build grain storage facilities. Glickman said the rules would take affect following the publication of final rules in the Federal Register.

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