Washington, DC – Colorado U.S. Senator Michael Bennet joined a push to help ensure that Colorado farmers and ranchers retain access to credit, which remains difficult to attain in today’s economy.
The bill, which was introduced today by Sen. Herb Kohl of Wisconsin, extends access to Farm Service Agency (FSA) loan guarantees, which serve farmers and ranchers who are unable to qualify for commercial loans. Often a farmer’s inability to qualify for commercial loans is due to reasons beyond their control, such as sudden market downturns or weather-related disaster. Bennet is an original cosponsor of the bill, along with fellow Colorado U.S. Senator Mark Udall.
“During our economic recovery, ensuring Colorado’s farmers and ranchers retain access to these loan guarantees is critical,” said Bennet. “As family farms across the state gear up for the 2011 crop year, we need to do everything we can to ensure they have access to credit when they need it most.”
As the lender of last resort, the FSA provides direct loans and loan guarantees that can be used to purchase farm real estate, cover operating expenses and in some cases refinance existing debt. The 1996 farm bill limited the number of years a borrower is eligible to receive assistance under the FSA direct and guaranteed programs, commonly referred to as a term limit. The bill established that a farmer or rancher would be eligible to receive 15 years of assistance in the guaranteed loan program.
Congress has continually recognized the inflexible nature of the guaranteed loan term limit by waiving it on several occasions including in 2002, 2006 and most recently in the 2008 Farm Bill.
In December, the 2008 Farm Bill provision expired causing guaranteed loan term limits to be implemented for the first time. This caused more than 4,100 borrowers to become ineligible to receive a loan guarantee from FSA. According to FSA numbers, an additional 1,500 borrowers could become ineligible for FSA loan guarantees unless Congress acts this calendar year.
This bill is supported by American Bankers Association, American Soybean Association, Independent Community Bankers, Farmer Mac, Farm Credit Council, National Cattlemen’s Beef Association, National Family Farm Coalition, National Farmers Union, National Milk Producers Federation, National Wheat Growers Association and Midwest Dairy Producers.