The Fair Credit for Farmers Act will improve the lives of farmers in North Dakota

Letters to the Editor | April 18th, 2024

To the editor:

Farmers and advocates across the country are asking their legislators to support farmers’ access to credit by co-sponsoring the Fair Credit for Farmers Act.

The Fair Credit for Farmers Act directly addresses many of the barriers farmers face as they attempt to access credit at the Farm Service Agency (FSA). Many farm families look to pass their farm to the next generation, credit is an essential tool for farmers to access land, yearly operating funds and the ability to expand and grow their businesses

The Fair Credit for Farmers Act will:

● Enact a targeted two year, interest-free direct loan payment deferral. As family farmers are slowly recovering from market disruptions, this act institutes a 2-year interest-free deferral on direct farm loans, if they haven’t received aid previously.

● Waive guarantees loan fees for historically underserved borrowers for 2 years. Guaranteed loan fees (paid to FSA as a loan closing cost) can be a substantial up-front expense, and therefore barrier, for farmers seeking a direct loan.

● Limit over-collateralization on farm loans and protect farmers’ homes. Over-collateralization is a common, but legally unnecessary, FSA lending practice which puts significant financial risk and limitations on farmers. This act also adds protections for farmers in delinquency against FSA taking their home or all their assets at once.

● Eliminate the loan eligibility term limit. Current FSA policy restricts farmers to only seven years of loan eligibility for operating loans, regardless of their financial status. When that time is up, only private banks can lend to them. This act eliminates FSA loan eligibility term limits for farmers who cannot access favorable credit options in the private sector.

● Ensure that farmers can refinance existing debt. With FSA loans, debt refinancing allows farmers to manage their debt and adapt to changing market and environmental contexts, such as trade wars or natural disasters. This act ensures that refinancing existing debt is eligible for FSA loans, which will help ensure that FSA can support farmers navigating tough times.

● Restore farmer FSA eligibility after a debt write-down: Currently farmers who have had a debt-write down are no longer eligible for FSA lending. This act restores FSA loan eligibility for farmers with previous debt write-downs.

● Improve transparency and fairness in the National Appeals Division (NAD) and make sure the farmer is told any potential reasons their loan could be denied before submitting paperwork. If a farmer feels their FSA loan has been denied erroneously, they can appeal through the (NAD). This act changes the burden of proof in NAD appeals to FSA, instead of the farmer, when the farmer’s annual farm income is $300,000 or lower.

The Fair Credit for Farmers Act will improve the lives of farmers in North Dakota. Contact Sens. Hoeven and Cramer, and encourage them to support the Fair Credit for Farmers Act. Ask them to do something positive for North Dakota’s family farmers.

Todd Leak

Emerado, ND

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