Farming is one of the hardest careers to pursue, in part due to high startup costs. Access to credit allows farmers to purchase the supplies they need and to get crops in the ground before the fruits of that labor are available. Improvements to Title V of the farm bill are key to securing much-needed capital for farmers, not all of whom are served equally. This post compares the proposals to expand access to capital which are included in the House and Senate proposals for the next farm bill.
New and beginning, socially disadvantaged, and small to mid-sized farmers with limited assets face particular challenges that prevent them from accessing credit from lending institutions, including commercial lenders or even the United States Department of Agriculture (USDA), which acts as a "lender of last resort." These farmers cannot leverage multi-million-dollar levels of farm debt, nor do they generally need to take on that much debt. It is therefore critically important that available credit options are scaled to appropriately accommodate farmers at multiple points in their careers and to address the needs of a diverse range of operations, practices, products, and markets.
Unfortunately, loan applicants with the greatest on-farm resilience and the best environmental outcomes are least likely to be approved or, if approved, to have the most expensive and difficult loan terms.
Read more at the NSAC Blog.