FSA back in business with CR passed

Administrator Dolcini talks about continued growth in loan needs.

Congress approved a continuing resolution (CR) to fund the government until Dec. 9 and has provided the U.S. Department of Agriculture's Farm Service Agency (FSA) with 20% of its estimated budget to get through the next few months.

FSA currently has a backlog of direct and guaranteed operating loans worth nearly $133 million, which the agency will start paying out on next week, according to FSA administrator Val Dolcini. “We will be able to address all of the loans currently backlogged,” Dolcini said of the more than 900 that were backlogged earlier in the week.

Earlier this month, congressional agriculture appropriators approved a USDA proposal to reallocate $185 million in funding to address a backlog of direct and guaranteed farm loan applications. These funds took care of roughly half of FSA's existing backlog (covering nearly 2,000 approved loan applicants).

Dolcini said he anticipates next year’s demand to be “robust” considering the softening agricultural economy and lower commodity prices. He said 2016 saw a record amount of loans and record number serviced, with $6.3 billion in direct and guaranteed loans paid out for the 39,500 loans.

This compares to levels of $5.7 million for 37,610 loans in 2015 and $5.2 million for 37,145 loans in 2014, FSA reported.

Dolcini said the continued growth in FSA loan use speaks to the need people have for federal credit assistance. He said although FSA has typically been referred to as the “lender of last resort,” it also is becoming known as the “lender of first opportunity” as more and more loan applicants are from individuals or operators who have never walked through FSA doors previously.

With the CR now completed, this sets up the need for action on another CR or an omnibus appropriations bill during the lame-duck session of Congress following the election. Farm groups have lobbied Congress for sufficient additional funding to allow FSA to fund both the loan backlog from fiscal 2016 as well as the increased demand for FSA assistance during the current economic downturn.

“On the bigger issue of whether sufficient funding will be added to the final appropriations bill for 2017 — the so-called omnibus bill expected to pass by or before Dec. 9 — we are optimistic that additional funding will be provided and will continue to press for that outcome,” explained Ferd Hoefner, policy director at the National Sustainable Agriculture Coalition.

Dolcini said even though funds are temporarily out, and may also be so again before December, the agency can still approve loans and put them into the queue to wait for new funding once it is available. He said he appreciated the support of the many groups that have sent letters to Congress calling for an adequate funding to meet the growing credit needs in the countryside.

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