USDA Expands Access To Credit For Farmers

USDA Expands Access To Credit For Farmers

USDA announced changes increase eligibility and financing options, helping more beginning and family farmers.

FAQ: Last week USDA announced some changes in its loan programs for beginning and family farmers including raising the borrowing limit for microloans, and updating eligibility criteria to include off-the-farm experience. Please explain these changes.

Answer: USDA Deputy Secretary Krysta Harden on Oct. 7, 2014 announced the agency will improve farm loans by expanding eligibility and increasing lending limits to help more beginning and family farmers.

USDA LOAN PROGRAMS: On Oct. 7 USDA announced changes in eligibility criteria for agency-supported loans. Microloan changes will allow beginning, small- and mid-sized farmers to access an additional $15,000 in loans using a simplified application process with up to 7 years to repay.

As part of this effort, USDA is raising the borrowing limit for the microloan program from $35,000 to $50,000; simplify the lending processes; updating required "farming experience" to include other valuable experiences; and expanding eligible business entities to reflect changes in the way family farms are owned and operated. The changes become effective November 7.

"USDA is continuing its commitment to new and existing family farmers and ranchers by expanding access to credit," says Harden. "These new flexibilities, created by the 2014 Farm Bill, will help more people who are considering farming and ranching, or who want to strengthen their existing family operation."

Changes in microloan program will help beginners
The microloan changes will allow beginning, small and mid-sized farmers to access an additional $15,000 in loans using a simplified application process with up to seven years to repay. These efforts are part of USDA's continued commitment to small and midsized farming operations, and new and beginning farmers.

In addition to farm related experience, other types of skills may be considered to meet the direct farming experience required for farm loan eligibility such as operation or management of a nonfarm business, leadership positions while serving in the military, or advanced education in an agricultural field.

Also, individuals who own farmland under a different legal entity operating the farm now may be eligible for loans administered by USDA's Farm Service Agency. Producers will have an opportunity to share suggestions on the microloan process, and the definitions of farming experience and business structures through Dec. 8, 2014, the public open comment period.

FSA wants your ideas on pilot projects
FSA is also publishing a Federal Register notice to solicit ideas from the public for pilot projects to help increase the efficiency and effectiveness of farm loan programs. Comments and ideas regarding potential pilot projects will be accepted through Nov. 7, 2014.

Since 2010, USDA has made a record amount of farm loans through FSA: more than 165,000 loans totaling nearly $23 billion. More than 50% of USDA's farm loans now go to beginning farmers. In addition USDA has increased its lending to socially-disadvantaged producers by nearly 50% since 2010.

These programs were made possible by the 2014 Farm Bill, which builds on historic economic gains in rural America over the past five years, while achieving meaningful reform and billions of dollars in savings for taxpayers, says Harden. For more information, visit

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