Senate Funding Bill Includes Needed Boost in Farm Credit
May 13th, 2010
In approving a $59 billion emergency supplemental funding bill to fund the ongoing wars in Afghanistan and Iraq, Haiti relief efforts, U.S. natural disaster aid, and disability compensation for Vietnam veterans, the Senate Appropriations Committee endorsed an amendment proposed by Senator Herb Kohl (D-WI), Chairman of the Agricultural Appropriations Subcommittee, to boost direct and guaranteed farm operating and ownership loan funding amounts by $950 million during the rest of FY 2010.
USDA’s Farm Service Agency has been indicating for months that farmer demand for loans is exceeding the funding levels made available by Congress in the regular FY 2010 Agricultural Appropriations bill last year. Despite this crisis situation brought on by constrained lending in the commercial markets and low dairy and livestock prices, the Obama Administration did not request the additional funding. Kohl thus took the lead to secure the needed resources.
Under congressional budgeting rules, the additional funding for farm lending had to be offset. The amendment approved today in Committee decreased funding for the Biomass Crop Assistance Program (BCAP) by $31.5 million, enough to fully pay for the subsidy and administrative costs of the additional nearly $1 billion farm loan volume.
Of the total, $350 million is appropriated for direct farm operating loans, which would bring direct operating loans to $1.35 billion for the year. An additional $300 million in the amendment is for guaranteed operating loans, and $300 million for guaranteed farm ownership loans. The latter can be used to refinance debt to help maintain the farm.
The supplemental bill next heads to the Senate floor, with a vote likely before Memorial Day, and then to the House. NSAC will be urging support for the Kohl measure throughout this process.