The Peninsula: Sen. Peters to introduce bill ensuring USDA loan capabilities

U.S. Sen. Gary Peters (D-MI) is moving to aid farmers alongside his colleague, U.S. Sen. David Perdue (R-GA), through the introduction of a bill that would secure the U.S. Department of Agriculture’s USDA Farm Service Agency (FSA) loan program.

That program provides millions to farmers across the country through direct loans and loan guarantees, providing an alternative to private banks for those in need. Both operating loans and ownership loans are provided, with the former used to pay for livestock, equipment, and seed, while the latter helps farmers develop their acreage.

However, demand has grown for these loans in recent years. The result has been reached long before the end of the fiscal year, leaving applications held up until Congress approved cap raises. In June 2016, for example, more than 3,000 loans were held up–despite being already approved–for months due to a lack of funds in the FSA’s operating loans budget. Only an emergency appropriation from Congress that December allowed matters to proceed.

Calling their legislative effort the Farm Service Agency Loan Flexibility Act, Peters and Perdue hope to give the agency more capabilities to support farms in high demand periods–and things are presently in a high demand period. After all, there are more than 2,300 farms with loans currently pending in Michigan alone. To counter this, their legislation would authorize the USDA to guarantee or create loans up to 25 percent above annual appropriations’ loan caps, if a need is found to exceed the cap. The FSA would also be allowed to pull stopgap funding from the Commodity Credit Corporation for increases that exceed appropriations, with that funding then being replenished through the appropriations.

“Agriculture is Michigan’s second largest industry, and our farmers not only raise world-class produce, crops, and livestock, they also create jobs and contribute to our local economy,” Peters said. “Without FSA financing, farmers in Michigan and across the country could lose their ability to purchase land, equipment, and other necessities, and could be forced to curtail operations – costing them time and money. This bipartisan bill will ensure the FSA loan program can continue to meet higher demand so farmers can focus on a successful harvesting season, and agriculture can continue being among the largest engines of economic growth in Michigan.”

The Michigan Farm Bureau and the Michigan Agri-Business Association have already voiced their support for the legislation. On the national level, so has the National Farmers Union.