In a statement for the record in a Senate Agricultural Committee hearing on commodities, credit and crop insurance, the American Bankers Association today called on lawmakers to reform the U.S. Department of Agriculture’s guaranteed farm loan programs in the 2018 Farm Bill.
Highlighting the important role that banks play in supplying credit to the nation’s producers, ABA noted that many utilize USDA’s loan programs to make credit more widely available to borrowers. The association called for increases to the current loan limit on Farm Service Agency guaranteed loans, adding that the formula for indexing the programs have not kept up with the rising cost of agriculture. ABA has endorsed legislation introduced by Rep. Mike Bost (R-Ill.) that would increase the cap from $1.4 million to $3.5 million and double the size of direct operating and ownership loans from $300,000 to $600,000.
ABA also urged lawmakers to take steps to modernize technology and increase staffing at FSA, consider bringing back FSA’s interest assistance programs and re-examine regulations that have been put in place surrounding confined animal feeding operations for FSA loan programs. Finally, the association recommended that Congress reform Farmer Mac by removing the current 1,000-acre limitation and considering whether to allow Farmer Mac to purchase all guaranteed loans from USDA.