Maximum loan amounts allowed under the Farm Service Agency’s (FSA) Direct and Guaranteed Loan Programs for individual farmers would be increased under legislation reintroduced last week.
The limit for FSA direct loans would be increased from $300,000 to $600,000, and the limit for loan guarantees would be increased from $1.39 million to $2.5 million, under the Capital for Farmers and Ranchers Act.
U.S. Sens. John Hoeven (R-ND), John Boozman (R-AK) and Luther Strange (R-AL) introduced the bill to give individual farmers more options to cover operating expenses, or to invest in farmland, as they face lagging commodity prices or natural disasters.
“Our farmers and ranchers need access to credit, especially during challenging times like these,” Hoeven, the chairman of the Senate Appropriations Subcommittee on Agriculture and Rural Development, said. “This legislation will help our agriculture producers maintain their operations by increasing FSA loan amounts to reflect the modern costs of farming and ranching. This would not only help ensure they can continue producing the highest quality, lowest cost food in the world, but also provide greater stability to rural economies across the country.”
In addition to day-to-day operating expenses, operating loans can be used for building repairs, family living expenses, debt refinancing, and water and land development costs. Farm ownership loans, meanwhile, can be used to purchase or develop farmland, to promote soil and water conservation, and to refinance debt.
“…Given the challenging economic conditions currently facing the agriculture industry, producers have been increasingly dependent on [U.S. Department of Agriculture] USDA loan programs to obtain credit and continue producing,” Boozman said. “This legislation updates USDA lending limits to more accurately reflect current farming operations and to better respond to downturns in the ag economy.”