U. S. Senator Herb Kohl today introduced legislation to ensure that farmers and ranchers will continue to have access to loan guarantees. The Farm Service Agency (FSA) offers loan guarantees to farmers who are unable to qualify for a commercial loan. Often times the inability of a farmer to receive a commercial loan is because of circumstances beyond their control, like weather-related disasters, sudden market downturns or economic downturns.
The FSA loan guarantee programs contain a limitation on the number of years a borrower is eligible to receive a loan guarantee. The Food, Conservation and Energy Act of 2008 (P.L. 110-246) waives implementation of this "term limitation.' The Kohl bill would extend the waiver for another two years in order to allow farmers to access loan guarantees that help cover operating expenses.
"In many of our rural communities, access to credit has become increasingly difficult, especially for farmers. Even those who were eligible for commercial credit just last year are not eligible for commercial loans without government guarantees today. These loan guarantees are critical to keep farms in business as they weather a rough agriculture economy," Kohl said.
The FSA estimates that more than 4,100 farmers and ranchers will become ineligible for loan guarantees if the waiver is allowed to expire at the end of the year, and an additional 2,300 will become ineligible over the next two years.
Kohl's legislation is supported by the following groups:
* American Bankers Association
* American Farm Bureau Federation
* Farm Credit Council
* Farmer Mac
* Independent Community Bankers of America
* Midwest Dairy Coalition
* National Association of Credit Specialists of the USDA-Farm Service Agency
* National Corn Growers Association
* National Cotton Council
* National Farmers Union
* National Milk Producers Federation
* USA Rice Federation
* Women Involved in Farm Economics (WIFE)
* Ohio Dairy Producers Association