Governor Sarah Huckabee Sanders and Arkansas Secretary of Agriculture Wes Ward announced a $5 million loan from the Governor's Quick Action Closing Fund to facilitate Delta Peanut's purchase of this year's peanut harvest as the company works to be acquired by an outside firm.
"Peanuts are an expanding crop market in Arkansas, and we can't allow this year's harvest to rot in the field and kill the entire industry," Sanders said. "My administration is stepping in to offer this short-term bridge loan and facilitate the purchase of this year's harvest."
In September, the U.S. Department of Agriculture announced it was pulling Delta Peanut's federal warehouse bond, and the company told its nearly 90 growers it would not be able to dry, process, or store their harvest. The only other federally bonded peanut warehouse in Arkansas is already operating at full capacity, and transporting the crop out of state is not financially feasible for most farmers.
"Governor Sanders took immediate and decisive action to save nearly 80 percent of Arkansas' peanut crop and help keep several farmers from being forced out of business," Ward said.
The loan will be used solely for operational costs like staff, utilities, and overhead. Farmers must agree to a $60-per-ton delivery fee and a bank subordination agreement granting the State priority lender status for repayment.
The loan agreement will not exceed six months and will be repaid as payments are received from USDA and delivery fees. Delta Peanut is negotiating with a third party to purchase the company and transfer operations after this harvest season, and has been provided a $2.7 million line of credit to allow USDA to reinstate its warehouse license.