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Farm Bill Loan Changes Offer Farmers More Flexibility

The recently passed 2018 Farm Bill included some new provisions for loans, providing higher limits and more flexibility to these important participants in our agriculture industry.

Loan limits increased for direct and guaranteed loans for both operating and farm ownership. Respectively, these additional monies can help pay operating expenses for a farm, and provide a way for producers to become owners of family farms and make improvements to farm operations. Direct loans are serviced by the Farm Service Agency, while guaranteed loans are managed by commercial lenders.

Additional expansions in this Farm Bill included limit changes to microloans. Microloans are unique, as they provide a means to fund new or small operations, or farmers in niche or nontraditional markets. Previously, producers could only have a total of $50,000 in microloans to pay for either operating or ownership costs. This has been increased to $50,000 for each operating and ownership. These expanded loans will help the farmers who need it most: those just getting started or pursuing nontraditional routes in agriculture. Beginners to agriculture can also now receive a 95% guarantee on their loans, versus the previous 90%.

Debt forgiveness once limited producers by excluding them from eligibility for emergency loans. This has also changed in the new Farm Bill. FSA Administrator Richard Fordyce says he hopes these updates to loans and similar programs will deliver the flexibility that farmers need. All of these Farm Bill changes seek to provide some relief to farmers who have experienced additional pressures due to market conditions, weather and more.

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