This week, Congressmen Bill Owens (D-NY), Joe Courtney (D-CT) and Richard Hanna (R-NY) introduced legislation (H.R. 1297) to increase access to credit for farmers. Their bill, the "Agricultural Credit Expansion Act," would expand the range of business structures that qualify for loans through the Farm Service Agency (FSA), ensuring more family farms are eligible for a range of financing options to help their operations grow and succeed.
"Like any small business, family farmers need the flexibility to structure their operations as they see fit without forfeiting critical access to capital," Owens said. "This legislation provides that flexibility so family farms in New York can continue to grow and drive economic development in the region."
"Family farmers in upstate New York are hardworking businesspeople who want to continue producing quality products for our families right here and markets abroad," Hanna said. "This bill does not create a new program or increase spending but modernizes the FSA loan program to keep pace with the modern business practices of our farmers."
"As farmers continue their economic recovery, it is vital that we provide them with the access to capital needed to keep their businesses open. This legislation will help farmers who are currently unable to access FSA loans finally get the resources they need. Additionally, this will benefit the next generation of farmers by aiding families who are passing their farm onto their children," said Courtney.
The Agricultural Credit Expansion Act would expand the range of business structures that qualify for loans and loan guarantees through the Farm Service Agency (FSA). Two types of business structures increasingly common among family farms do not currently qualify for loans through the FSA. These include when family farms divide into a farm ownership LLC or farm operating LLC to facilitate ownership by multiple family members, and farms operating with an "embedded entity structure," which are also currently ineligible for an FSA loan. An embedded entity occurs when one entity is owned wholly or partly by another entity.
Owens, Courtney and Hanna introduced identical legislation in the 112th Congress (H.R. 874).