On Oct. 12, the Farm Credit Administration board approved a final rule governing the Farm Credit System’s service to young, beginning and small farmers and ranchers. The final rule becomes effective on Feb. 1, 2024, and revises YBS regulations at 12 C.F.R. part 614.
The rule was enacted to:
- Expand the YBS activities of direct-lender associations to a diverse population of borrowers;
- Reinforce the supervisory responsibilities of the banks that fund the direct-lender associations, and require the banks to annually review and approve the associations’ YBS programs; and
- Require each direct-lender association to enhance the strategic plan for its YBS program.
FCA defines young farmers as those who are 35 years old or younger, beginning farmers as those who have been farming for 10 years or less, and small farmers as those with gross annual sales of less than $250,000. Since the value of $250,000 is much less today than it was when FCA first implemented the YBS reporting requirements, the agency will raise this figure to $350,000 beginning next year.
According to FCA the average age of the American farmer and rancher is approximately 60 years old. FCA will transition to a new YBS reporting system in 2024 to provide a clearer picture of YBS lending by allowing the agency to better break down and categorize loan data. The Farm Credit System made $13.1 billion in loans to young farmers in 2022, $21.5 billion to beginning farmers and $19.1 billion to small farmers.