Sen. John Hoeven (R., N.D.) reintroduced his Capital for Farmers & Ranchers Act. The legislation, which is co-sponsored by Sens. John Boozman (R., Ark.) and Luther Strange (R., Ala.), would increase the maximum loan amount an individual farmer or rancher is able to receive under the U.S. Department of Agriculture's Farm Service Agency’s (FSA) Direct and Guaranteed Loan Programs for Farm Operating Loans and Farm Ownership Loans.
Many producers are concerned that 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.”
Boozman said, “Arkansas agriculture producers rely on access to credit to operate and grow their farms and ranches. 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.”
“As agricultural equipment costs continue to grow, access to capital is critical to the long-term success of our nation’s growers and producers,” Strange added. “Alabama farmers contend with tax burdens, price fluctuations and everything Mother Nature can throw at them, but one thing they should not have to worry about is securing the resources to start and maintain prosperous operations. I am proud to join my colleagues in carrying this legislation to make life easier for those growing the future of our state.”
Specifically, the bill would increase the 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 covers two types of loans and loan guarantees:
- Farm Operating Loans – To purchase livestock, farm equipment, feed, seed, fuel, farm chemicals and insurance and to cover 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.
- Farm Ownership Loans – To purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation and to refinance debt.