In testimony submitted for a Senate Agriculture Committee hearing on the state of the farm economy today, ABA noted that the nation’s 1,912 farm banks are strong and well-positioned to continue supporting farmers and ranchers despite projected declines in farm income.
“In 2016, farm banks… increased lending by 5.3 percent to meet the rising needs of farmers and ranchers, and now provide over $103 billion in total farm loans,” ABA said. “Farm banks are healthy, well-capitalized and stand ready to meet the credit demands of our nation’s farmers large and small.”
As Congress prepares to renegotiate the Farm Bill in 2018, ABA called for several changes to the bill that would expand access to credit in the agricultural sector. Specifically, ABA urged lawmakers to increase the current loan limit of $1.399 million on Farm Service Agency guaranteed loans, noting that the formula for indexing the programs has not kept pace with the rising cost of agriculture. Increasing the loan caps would allow lenders to continue meeting the needs of their agricultural borrowers, particularly those who are young, beginning or small farmers or ranchers, ABA said.
The association also urged lawmakers to modernize technology and increase staffing at FSA, consider bringing back FSA’s interest assistance programs and examine regulations that have been put in place surrounding confined animal feeding operations for FSA loan programs.