Programs under the Farm Bill’s Title V, Credit authorize USDA agricultural credit and rural development programs. In addition to these programs, the “USDA serves as a lender of last resort to farmers and ranchers who are denied direct credit by commercial lenders by providing direct and guaranteed loans.”[1]
The Consolidated Farm and Rural Development Act (ConAct) first authorized credit and rural development programs through three types of loans, which have been carried through the 2014 Farm Bill.[1] The first type of loan, farm ownership loans are for real estate purchases. Previously, these loans have required three years of farming experience, but the 2014 Farm Bill allows USDA discretion to allow alternatives to this requirement.[1] Second, the ConAct offers farm operating loans for purchasing livestock, feed, seed, equipment, supplies, land or water development, and other purposes.[2] Finally, emergency loans are for recovery from natural disasters and quarantines.
The State Agricultural Loan Mediation Program is “a matching grant program for states that provide third party mediation for agricultural credit disputes.”[2] In participating states, mediation settles disputes in many different USDA program areas, such as farm loans and rural water loan programs.[3]
The 2014 Farm Bill makes relatively small policy changes to these programs. Some small adjustments were made: the new bill “increases the percentage of a conservation loan that can be guaranteed, adds another lending priority for beginning farmers, and facilitates loans for the purchase of highly fractionated land in Indian reservations.”[1]
For a comprehensive summary of the credit programs authorized in the 2014 Farm Bill, check here.
[1] Chite, Ralph. The 2014 Farm Bill (P.L. 113-79): Summary and Side-by-Side, Congressional Research Service. http://nationalaglawcenter.org/wp-content/uploads/2014/02/R43076.pdf
[2] Wallace, Siobhan. “Credit Programs.” http://www.thefarmbill.com/#!title-5-credit-programs/c5l8
[3] Farm Service Agency. “Agricultural Mediation Program,” USDA. https://www.fsa.usda.gov/Internet/FSA_File/ag_mediation_program.pdf