Peters Announces Bipartisan Bill to Help Small Farmers

USDA Farm Service Agency Provides Direct Loans, Loan Guarantees to Help Family Farmers Start & Grow Their Operations

WASHINGTON, DC – Today, U.S. Senator Gary Peters (MI) visited Dream Winds Dairy farm in Ottawa County, where he announced bipartisan legislation to preserve critical loans used by small farmers to start and grow their operations. The bill, which he will be introducing with Republican David Perdue (GA), would ensure the U.S. Department of Agriculture (USDA)’s Farm Service Agency (FSA) loan program can fulfill its commitments to already-approved loan applications.

In recent years, the program had reached its cap well before the end of the fiscal year and could not provide approved loans to farms until Congress raised the caps. The Farm Service Agency Loan Flexibility Act will provide greater flexibility to the FSA loan program to provide support to farms during periods of high demand. There are currently more than 2,300 Michigan farms with FSA loans totaling over $630 million.

“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,” said Senator Peters. “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.”

“Thanks to the Farm Services Agency, Dream Winds Dairy has grown exponentially with a new barn and additional cows to provide Michiganders locally-sourced, quality dairy products,” said Paul Windemuller, Owner of Dream Winds Dairy Farm in Ottawa County, Michigan. “As technological advances continue to change farm operations, the success of the FSA loan program will become even more critical for the long-term success of farms like ours. I thank Senator Peters for visiting Dream Winds Dairy and his work to support Michigan’s agriculture industry.”

“Agriculture is Georgia’s largest economic driver and our farmers are the backbone of the industry,” said Senator Perdue. “Whether our farmers are just starting out or are looking to expand and improve, it’s critical they have the financial flexibility they need to get their farms up and running. I’m proud to work with Senator Peters to strengthen this important loan program for our country’s farmers.”

The Farm Service Agency provides direct loans and loan guarantees to beginning farmers, women and minorities, and other disadvantaged borrowers who are unable to obtain assistance from private banks. FSA’s operating loans can be used for expenses such as livestock, equipment, and seed, while ownership loans help farmers develop land. In recent years there has been increased demand for FSA’s loan programs, as net farm income has significantly declined since 2013. In June 2016, over 3,000 loans that had already been approved could not be funded for several months due to a shortfall in funding for FSA operating loans, leaving farmers without necessary financing. As a result, Congress was forced to pass an emergency appropriation in December of 2016 to address the shortfall. 

“Michigan Farm Bureau applauds Senator Gary Peters for introducing the Farm Service Agency Loan Flexibility Act. Farm Bureau policy has long supported greater availability of FSA loans and access to credit for young and beginning farmers. This bill will help more farmers utilize the FSA loan program throughout the year and when caps have been met,” said John Kran, Michigan Farm Bureau (MFB) National Legislative Counsel.

“Access to credit is absolutely critical to ensure a strong agriculture sector in Michigan and throughout the nation, and the Michigan Agri-Business Association fully supports this effort to ensure FSA has the flexibility it needs to properly serve farmers,” said Jim Byrum, president of the Michigan Agri-Business Association and a former Farm Service Agency state executive director. “By modernizing, improving and providing more commonsense flexibility for FSA’s loan programs, the bill introduced by Senator Gary Peters and Senator David Perdue will provide certainty for those who rely on FSA loans while ensuring a pathway into agriculture for new and beginning farmers.”

“Farmers and ranchers have endured a steep decline in profitability over the past five years as net farm income has been cut in half. Loan demand has reached historic levels and funding has run out on numerous occasions while farmers and ranchers turn to FSA for a credit lifeline. The Peters-Perdue bill will directly help farmers in need by harmonizing the congressional budget windows that provide loan funding with actual planting windows. We are very grateful for their efforts to ensure credit gets to family farmers and ranchers when they need it,” said Roger Johnson, President, National Farmers Union.

The Farm Service Agency Loan Flexibility Act would:

  • Authorize USDA to guarantee or make loans up to 25% above the loan cap set in annual appropriations, if it determines that need for farm ownership and operating loans exceeds the cap. FSA may increase either or both guaranteed and direct loans, which have separate caps.
  • Allow FSA to draw stopgap funding from the Commodity Credit Corporation – which generates funds from its earnings and borrowing activities as a financial institution with a mission to support farm income – to the extent that these increases exceed current appropriations. This funding would be replenished through appropriations.