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Provisions |
1996-2001 farm legislation
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2002 Farm Bill |
| FSA
farm loan programs. The Secretary can make or
guarantee real estate loans, operating, and emergency
loans to family-sized farms unable to obtain sufficient
credit elsewhere on reasonable terms. |
Provisions were waived through 2002 that had
prevented borrowers from qualifying for new guaranteed
operating loans after receiving either direct or
guaranteed operating loans for a period of 15 years, and
from qualifying for new direct operating loans after 7
years. |
Eligibility time limits on guaranteed operating loans
are waived through 2006. Borrowers with direct operating
loans are eligible, case-by-case, for a one-time waiver
for 2 additional years of eligibility. Native Americans
whose farms or ranches are within the jurisdiction of an
Indian Reservation may be exempt from eligibility limits
on direct operating loans and also become eligible for
95% guarantees on operating loans instead of a 90%
guarantee. USDA and State, county, or area committee
employees become eligible for FSA farm loans. |
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Borrower must have owned or operated a farm or ranch
for at least 3 years to be eligible for a direct farm
ownership loan.
Use of direct farm ownership loans to
refinance commercial debt was prohibited.
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Borrowers must
have participated in the operation of a farm or ranch
for at least 3 years to be eligible for a direct farm
ownership loan. Refinancing of commercial debt is
allowed for direct farm ownership loans if the debt was
incurred for a farm purchase while waiting for funding
of an approved farm ownership loan application. |
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Borrowers who had received FSA debt forgiveness under
certain procedures may have been eligible for further
direct or guaranteed loans, but only for annual
operating expenses.
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Borrowers having received debt forgiveness may also
be eligible for new direct or guaranteed operating loans
if forgiveness resulted from a declared major emergency
or natural disaster. Beside areas designated as natural
disasters, low-interest emergency loans are also
available in areas under plant or animal quarantines.
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| A 4% interest-rate
reduction was available annually on up to $490 million
of guaranteed operating loans through 2002. |
A 4% interest-rate
reduction program for guaranteed operating loans is made
permanent, with 15% of the $750 million in annual
authority set aside for beginning farmers until March 1
of each fiscal year. |
| FSA
loans to beginning farmers |
A limit on the amount of acreage beginning farmers
could own and be eligible for farm ownership loans was
set at 25% of the county median. Beginning farmers were
eligible for farm purchase downpayment loans at 4% fixed
rates for 10 years in amounts equal to the lesser of 30%
of the sale price or of the appraised value.
Farm property obtained by FSA was held for sale to
beginning farmers for 75 days before being sold to
others. |
Acreage limit increases to 30% of county median for
beginning farmers to be eligible for farm ownership
loans. Beginning farmer downpayment loans at 4% fixed
rates can be made for up to 15 years in amounts equal to
the lesser of 40% of the sale price or of the appraised
value.
Beginning farmers have preference to buy
FSA inventory farm property for 135 days before it is
sold to others. Inventory properties are to be divided
or combined to make them more suitable for these
borrowers.
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| No similar
provisions. |
Pilot program
allows FSA to guarantee up to 5 owner-provided loans
(land contracts for sale) per year through 2006 to
beginning farmers purchasing a farm or ranch in at least
5 geographically diverse States. |
| No similar
provisions. |
FSA may guarantee
loans made under State beginning farmer loan programs
that use small-issue agricultural bonds. (A change in
the tax code is still required.) |
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FSA funding levels |
Annual loan program authorization levels were set at
$85 million for direct farm ownership loans, $500
million for direct operating loans, $750 million for
guaranteed farm ownership loans, and $2.1 billion for
guaranteed operating loans. |
Annual loan program
authorization levels set at $205 million for direct farm
ownership loans, $565 million for direct operating
loans, $1 billion for guaranteed farm ownership loans,
and $2 billion for guaranteed operating loans.
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Other FSA
provisions |
No similar provisions.
|
County committee involvement on farm loan decisions
and procedures is reduced. A greater number of FSA
employees provided the authority to handle farm loan
decisions, provided they receive appropriate
training. |
| Lower documentation
was required from lenders requesting loan guarantees in
amounts up to $50,000. |
Low-documentation
procedures are available to lenders requesting loan
guarantees in amounts up to $125,000. |
| Secretary was to
report to Congress on demand for and availability of
credit in rural areas for agriculture, housing, and
rural development. Study was to analyze how well the
Farm Credit System, commercial banks, and Federal
agencies fulfill rural credit demand. |
Secretary is to
undertake 2 1-year studies on FSA direct and guaranteed
lending programs, reporting to Congress on effectiveness
of the programs in meeting the credit needs of
agricultural producers in an efficient and fiscally
responsible manner. |
Key provisions