US Agriculture Secretary Tom Vilsack has announced increased opportunity for producers as a result of the 2014 Farm Bill. A fact sheet outlining modifications to the U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) Farm Loan Programs is available here.
“Our nation’s farmers and ranchers are the engine of the rural economy. These improvements to our Farm Loan Programs will help a new generation begin farming and grow existing farm operations,” said Secretary Vilsack. “Today’s announcement represents just one part of a series of investments the new Farm Bill makes in the next generation of agriculture, which is critical to economic growth in communities across the country.”
The Farm Bill expands lending opportunities for thousands of farmers and ranchers to begin and continue operations, including greater flexibility in determining eligibility, raising loan limits, and emphasizing beginning and socially disadvantaged producers.
Changes that will take effect immediately include:
Elimination of loan term limits for guaranteed operating loans.
Modification of the definition of beginning farmer, using the average farm size for the county as a qualifier instead of the median farm size.
Modification of the Joint Financing Direct Farm Ownership Interest Rate to 2 percent less than regular Direct Farm Ownership rate, with a floor of 2.5 percent. Previously, the rate was established at 5 percent.
Increase of the maximum loan amount for Direct Farm Ownership down payments from $225,000 to $300,000.
Elimination of rural residency requirement for Youth Loans, allowing urban youth to benefit.
Debt forgiveness on Youth Loans, which will not prevent borrowers from obtaining additional loans from the federal government.
Increase of the guarantee amount on Conservation Loans from 75 to 80 percent and 90 percent for socially disadvantaged borrowers and beginning farmers.
Microloans will not count toward loan term limits for veterans and beginning farmers.
National Farmers Union (NFU) Senior Vice President of Programs Chandler Goule issued the following statement on U.S. Secretary of Agriculture Tom Vilsack’s announcement:
“Throughout the 2014 Farm Bill reauthorization process, NFU advocated for common-sense reforms that would help small, beginning and socially disadvantaged farmers and ranchers better access agricultural credit. I commend Secretary Vilsack for implementing these farm bill provisions, such as elimination of term limits for guaranteed operating loans, a more accurate definition of beginning farmer, and an increase in the maximum loan amount for Direct Farm Ownership down payments, in a timely manner to help support the next generation of family farmers and ranchers.”