USDA Expands Credit for Beginning Farmers
October 9, 2014
WASHINGTON — Agriculture Deputy Secretary Krysta Harden today
announced that the U.S. Department of Agriculture (USDA) will improve
farm loans by expanding eligibility and increasing lending limits to
help more beginning and family farmers. As part of this effort, USDA is
raising the borrowing limit for the microloan program from $35,000 to
$50,000; simplify the lending processes; updating required “farming
experience” to include other valuable experiences; and expanding
eligible business entities to reflect changes in the way family farms
are owned and operated. The changes become effective Nov. 7.
“USDA is continuing its commitment to new and existing family farmers
and ranchers by expanding access to credit,” said Harden. “These new
flexibilities, created by the 2014 Farm Bill, will help more people who
are considering farming and ranching, or who want to strengthen their
existing family operation.”
The microloan changes announced today will allow beginning, small and
mid-sized farmers to access an additional $15,000 in loans using a
simplified application process with up to seven years to repay.
Microloans are part of USDA’s continued commitment to small and midsized farming operations.
In addition to farm related experience, other types of skills may be
considered to meet the direct farming experience required for farm loan
eligibility such as operation or management of a non-farm business,
leadership positions while serving in the military, or advanced
education in an agricultural field. Also, individuals who own farmland
under a different legal entity operating the farm now may be eligible
for loans administered by USDA’s Farm Service Agency (FSA). Producers
will have an opportunity to share suggestions on the microloan process,
and the definitions of farming experience and business structures
through Dec. 8, 2014, the public open comment period.
FSA is also publishing a Federal Register notice to solicit
ideas from the public for pilot projects to help increase the efficiency
and effectiveness of farm loan programs. Comments and ideas regarding
potential pilot projects will be accepted through Nov. 7, 2014.
Since 2010, USDA has made a record amount of farm loans through FSA —
more than 165,000 loans totaling nearly $23 billion. More than 50
percent of USDA’s farm loans now go to beginning farmers. In addition,
USDA has increased its lending to socially-disadvantaged producers by
nearly 50 percent since 2010.
These programs were made possible by the 2014 Farm Bill, which builds
on historic economic gains in rural America over the past five years,
while achieving meaningful reform and billions of dollars in savings for
taxpayers. Since enactment, USDA has made significant progress to
implement each provision of this critical legislation, including
providing disaster relief to farmers and ranchers; strengthening risk
management tools; expanding access to rural credit; funding critical
research; establishing innovative public-private conservation
partnerships; developing new markets for rural-made products; and
investing in infrastructure, housing and community facilities to help
improve quality of life in rural America. For more information, visit www.usda.gov/farmbill.