A recent report from the Government Accountability Office advocates creating a grant program for disadvantaged farmers who may have less access to current funding opportunities.
Minorities and women may have trouble getting loans to buy and run farms, the report says, noting that socially disadvantaged farmers and ranchers are more likely to operate smaller, lower-revenue farms; have weaker credit histories; or lack clear title to their agricultural land.
The GAO said establishing a grant program within the Farm Credit System would involve considerations for policymakers, including how the program size and funding approach would affect FCS’s mission; whether the program would expose FCS to legal challenges, and whether the program would duplicate existing federal programs.
The GAO explored three different funding scenarios that would use 5%, 10% and 15% of the Farm Credit Banks’ net income. Several farm credit banks pushed back on the financial feasibility of providing new grant opportunities this way, according to reporting from Politico, saying these hypothetical grant funding scales would add further stress on current borrowers.
FCS data for 2013–2022 was analyzed to examine the potential effects of a grant program. The GAO also compared FCS data that reflected more and less stressful periods for FCS (1984–1993 and 2013–2022, respectively). GAO interviewed officials from the Farm Credit Administration, Farm Credit Banks, Farm Credit Council, and socially disadvantaged farmer and rancher advocacy groups.
In a letter representing the views of its bank members, the Farm Credit Council said that the report is comprehensive but raised concerns about some of the analyses.