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House introduces Fair Credit for Farmers Act to Improve Financial Security in 2023 Farm Bill

WASHINGTON, DC, August 30, 2023 – The National Family Farm Coalition (NFFC), Rural Advancement Foundation International – USA (RAFI-USA) and more than 90 organizations sent a joint letter of support to Members of Congress applauding the Fair Credit for Farmers Act, introduced yesterday as H.R. 5296 by Representative Alma Adams (NC-12) and as S. 2668 by Senator Kirsten Gillibrand (NY) and Senator John Fetterman (PA) last month. The Act improves access and accountability for the farm loan services offered by the U.S. Department of Agriculture’s Farm Service Agency (FSA) and strengthens the borrower rights of the farmers and ranchers who provide our food, feed, and fiber.

“We’re glad to see the House and Senate demonstrate nationwide support for making farm credit access fairer while bringing necessary accountability and transparency to the FSA,” said Jim Goodman, board president of the National Family Farm Coalition. “The Fair Credit for Farmers Act of 2023 improves many functions within FSA – the lender of last resort for many producers – through optional debt refinancing, payment deferral, reduced collateralization of farmers’ homes and assets, and mitigating the appeals process for farmers, placing the burden of proof on FSA, rather than on them.”

Low prices and poor economic conditions have challenged small- to mid-scale farmers and ranchers for decades, with many relying on FSA loans to fund their businesses despite historic challenges accessing them. Persistent market fluctuations have left thousands of farmers in danger of losing their farms and homes, and U.S. farm debt is higher than ever before — stretching beyond $500 billion in 2023.

“This Act will remove the loan eligibility term limit, establish a two-year, interest-free deferral on direct loans, and extend the repayment term by two years,” said Ben Vig, North Dakota farmer with Dakota Resource Council. “These are huge improvements to current FSA terms that will make it easier for farmers like me to compete with big money to buy land and update equipment.”

Furthermore, the FSA has been criticized for unfair lending practices and burdensome requirements that have harmed farmers of color. The improvements to government lending accountability and transparency found within the Act will better ensure that historically underserved farmers and ranchers receive equal treatment in FSA lending and appeal processes.

Tiffany Bellfield El-Amin, Community Farm Alliance Food System Equity Organizer and NFFC vice president, said, “Small-scale, beginning or young farmers and farmers of color must have access to credit on fair and reasonable terms without fear of losing our homes and other collateral. Fair credit access would enable more farmers to sustain and grow our operations, support our families and feed our communities, helping us to thrive economically and remain resilient.”

As 2023 Farm Bill negotiations progress, this new legislation could rebalance the relationship between farmers and FSA to one of equal partners seeking farm success. With stronger protections and credit terms that recognize the unique challenges of farming, the Act will create long-term payoffs that strengthen rural communities across America.

The full text of H.R. 5296 is found here, and the full text of S. 2668 is found here.

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