Improve Access to Credit through the Farm Service Agency (FSA)

In a 2017 survey conducted by the National Young Farmers Coalition, 15% of young farmer respondents reported using FSA farm ownership loans. Yet barriers in outreach, eligibility, and program execution still keep many young and BIPOC farmers an arms reach from the federal funds that help create viable land tenure. This is on a top of long-standing discrimination toward non-white farmers at the USDA that has been directly tied to historic and ongoing land loss in BIPOC farming communities.

Recommendations

  • Establish pre-approval to ensure that farmers can remain competitive in the real estate market.
  • Allow farmers to apply for and manage their loans online.
  • Ensure FSA farm ownership loan limits remain adequate to cover the cost of real estate and tie loan limits to inflation. Congress increased the direct farm operating loan limit to $600,000 in the 2018 Farm Bill, indexed for inflation, which will be a help to farmers using this program to access land. Federal loan limits must continue to stay current with the needs of farmers.
  • Provide no-interest loans to beginning farmers of color.
  • Establish lending guidelines for loans to low-income resident farmers and BIPOC-led farmer cooperatives. Read more here.
  • Continue to increase set asides and specific programs within FSA to assist with farm purchase for beginning farmers and farmers of color, such as the Down Payment Program, Loan Contract Guarantee Program, and Direct Farm Ownership Microloan Program.
  • Explore tweaks to the little-used Land Contract Guarantee Program to facilitate increased farmland transition.