The Capital for Farmers and Ranchers Act would increase the Farm Service Agency’s (FSA) loan guarantee amount from $1.39 million to $2.5 million and double the amount of direct loans from $300,000 to $600,000. This can be for farm ownership loans and farm operating loans.
Farm ownership loans can be used to purchase of farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation, and to refinance debt.
The farm operating loans can be used to purchase livestock, farm equipment, feed, seed, fuel, farm chemicals, insurance, and other operating expenses. It can also be used for minor improvements to buildings, costs associated with land and water development, family living expenses and debt refinancing in certain circumstances.
“Arkansas agriculture producers rely on access to credit to operate and grow their farms and ranches,” Boozman said. “Given the challenging economic conditions currently facing the agriculture industry, producers have been increasingly dependent on USDA loan programs to obtain credit and continue producing. This legislation updates USDA lending limits to more accurately reflect current farming operations and to better respond to downturns in the ag economy.”
Many producers say the current maximum loan amounts do not grant them the flexibility they need to operate when revenue is limited, for instance, when facing low commodity prices or natural disasters.
“Our farmers and ranchers need access to credit, especially during challenging times like these,” Hoeven 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.”
Access to capital is critical for farmers in the face of rising equipment costs, Strange said. He said they should not have to worry about securing the resources to start and maintain operations.
“I am proud to join my colleagues in carrying this legislation to make life easier for those growing the future of our state,” Strange said.