U.S. Senator Herb Kohl (D-Wis.) introduced legislation this week 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 says.
Source: Big News