Bankers’ priorities for this year’s Farm Bill reauthorization include increasing the loan limits for Farm Service Agency guaranteed loan programs, giving banks more flexibility in the lending process to help young farmers and ranchers, and increasing funding levels in rural development loan programs, the American Bankers Association said today in comments to the Senate Agriculture Committee.
The committee last year kicked off a series of hearings on the Farm Bill, which continued today with a hearing focusing on commodity programs, crop insurance and credit. In its comments, ABA noted that farm banks make up the largest share of bank loans to farmers. The association also cited its support for the upcoming Access to Credit for our Rural Economy Act, or ACRE, which would help to lower lending costs for farmers, ranchers and rural communities.
ABA, working with a committee of bankers, has developed a list of bank industry priorities for the Farm Bill. The first recommendation is to increase FSA loan limits for guaranteed farm ownership from $1.75 million to at least $3 million to account for rising land prices. The association also recommended that FSA-guaranteed farm operating loans be increased from $1.75 million to at least $2.5 million to keep pace with the rising costs of inputs.
ABA asked for more flexibility for banks when lending to beginning farmers and ranchers. “This flexibility should include less paperwork and the ability to use off-farm income when applying for beginning farmer and rancher loan programs,” ABA said. The association also recommended increasing the dollar limit of the Down Payment Assistance Program to align with the realities of agricultural land prices; reinstating the interest assistance programs for FSA guaranteed loan programs; increasing rural development funding, particularly the Business and Industry and the Communities Facilities loan programs; and giving the FSA the funding it needs to modernize its loan program technology.