March 7, 2014
Beginning in 2011, NSAC launched a campaign around Beginning and Socially Disadvantaged Farmer and Rancher programs in the Farm Bill, and ultimately helped win on quite a number of issues in the final legislation. The NSAC-championed marker bill, the Beginning Farmer and Rancher Opportunity Act, was championed by members in both chambers, led by Senator Tom Harkin (D-IA) and Representative Tim Walz (D-MN), and many of the bill’s provisions were included in the final 2014 Farm Bill.
Among other provisions, the bill included policy proposals that would increase access to credit and reduce barriers to acquiring land for beginning farmers and ranchers. Now that the Farm Bill has passed, NSAC has shifted its attention to agency rule-making to ensure that programs included in the Farm Bill are implemented soundly.
USDA’s Farm Service Agency (FSA) was quick to act on implementing several of the Farm Bill authorized changes to farm credit opportunities for beginning and socially disadvantaged farmers and ranchers, specifically in relation to guaranteed and direct loan making.
Effective immediately, as of February 7, 2014, the guaranteed loan program reflects the following revisions: the percentage guarantee for guaranteed conservation loans has increased to 90% for Socially Disadvantaged Farmers, and the previous 15-year term limit for ownership loans has been eliminated.
Also, the interest rate for joint financing loans, which leverage scarce federal credit appropriations with private lending resources, have been adjusted. Now, if the the amount of FSA’s loan does not exceed 50 percent of the total amount financed, the interest rate will be the greater of either the current interest rate for direct Farm Ownership Loans, minus 2 percent, or 2.5 percent.
Another positive change that will help beginning farmers gain access to land is the increase in total value of farmland that can be FSA-financed for beginning farmers to $667,000 from $500,000 within the Down Payment Loan program. This change will help improve the farm start-up program, especially in areas with high land values.
Our hats are off to USDA’s Farm Service Agency for implementing these new farm bill provisions so quickly! We look forward to working with USDA to get the rest of the 2014 Farm Bill’s beginning farmer provisions off the ground.