A new Farm Bill in 2024 has the potential to reshape how banks do business in the agricultural sector, ABA SVP Ed Elfmann said yesterday during an interview with an Indiana-based radio station.
“The big things that have changed for us is how we deal with the large ag transition that’s going to happen in the next few years,” Elfmann said, adding that the credit title of the Farm Bill—which covers federal loan programs designed to help farmers access the financial credit—is one of the top priorities for the banking industry, as many farms over the next decade may be switching hands as older farmers retire.
Increasing farm ownership and operating loan programs from the USDA’s Farm Service Agency is a priority, Elfmann said. “They’re currently a lot smaller than we’d like them to be,” he explained. “They’re about $2 million, but we want to increase them to $3.5 million on ownership and $3 million on operating.” It costs more to get ag operations up and running, and “we’re trying to set up our credit to make sure that we can help beginning farmers” get into farming and agriculture,” Elfmann said.
Because of this, Elfmann said that some of the rules regarding beginning farm loans need to be restructured. “We have a lot of issues … around beginning farmer loans and how they’re set up,” he explained. “If a farm was put into a trust 20 years ago and the farm owner has died, now there are 20 people involved in that trust. If you try to get a beginning farmer loan, you can’t because you have to lend against the trust. That’s a barrier to entry and we want to … make it easier for beginning farmers.”