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Serving: United States

Lending institutions push to increase funds

Groups urge FSA to increase available capital for farm lending.


Farmers and ranchers need financing for year-round, every-day needs, during good times and bad. Financing is as much a part of farming as water and land. And it’s especially important for farmers, ranchers, livestock and other producers to have reliable and flexible access to credit during harsh financial climates.

That’s why it’s important for agricultural credit providers, like farm banks, to have the tools they need to make sure that producers, from small urban producers to large rural farmers and ranchers, can thrive regardless of bad weather or fluctuations in the marketplace.

Tough times

It’s no secret that times are tough: the dollar is stronger, exports have been weak in general, more and more producers have suffered reduced cash flow, and demand for short-term operating loans has increased significantly. Demand has increased so much that the Farm Service Agency’s (FSA) reserve of more than $1.4 billion for Guaranteed Operating Loans was depleted far before the end of Fiscal Year 2016. And the FSA’s allocation for Direct Operating Loans isn’t far behind.

But there's more hope on the horizon: a team of farmers and agricultural credit advocates, including the American Bankers Association, the National Farmers Union and the Farm Credit Council, have brought this issue to the attention of the Chairmen and Ranking Members of the Agriculture Subcommittees of the Senate Committee on Appropriations and the House Committee on Appropriations. We’re asking for a modest increase in the FSA’s budget authority so that it can accommodate more farmers and producers.

Despite these tough times, farm banks are moving full steam ahead to help farmers get the credit they need. In 2015, banks across the country made $170 billion worth of farm loans, with $75 billion in small and micro loans. More than 550 of our community banks extend between 50% and 97% of their annual lending to farmers, ranchers and other producers.

Farm banks and other agricultural credit providers are proud to be rooted in their communities. And that means helping their communities, one loan at a time, during good times and bad.

The opinions of the author are not necessarily those of Farm Futures or Penton Agriculture.

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