Fair Credit for Farmers Act can help farmers find loans.
In a way, we bet the farm. &# 13,
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When my family needed to expand our dairy farm in the 1980s, we borrowed money from a nearby bank to fix some calf pens and add some more. Our 200 acres were used as security. &# 13,
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Fortunately, our wager was successful. Later, we were able to repay the loan with enough money from milk checks. &# 13,
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Some others did not have the same luck, and as the 1980s Farm Crisis developed, the collapse of the grain markets and the rise in interest rates caused farmers to default on loans and declare bankruptcy. Although we lack information from 1980 to 1986, the bankruptcy rate in 1987 was the highest ever recorded— 23.05 per 10,000 farms, even as the crisis was coming to an end. &# 13,
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Color farmers have had it worse. The United States Department of Agriculture ( USDA ) officials denied loans to Black farmers for decades for no other reason than the color of their skin, according to congressional investigations conducted in the 1990s. The Pigford v. Glickman class action settlement that followed paid damages totaling more than$ 2 billion. &# 13,
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Finding respectable credit is still difficult in this line of work. Being able to obtain a loan to purchase land is the main obstacle facing people who want to start, as nicely as continue, farming, according to data from the National Young Farmers Coalition. &# 13,
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The Fair Credit for Farmers Act is therefore important because of these issues. Representative Alma Adams of North Carolina introduced this bill as H. R. 5296, Senators Kirsten Gillibrand of New York and John Fetterman of Pennsylvania introduced it as S. 2668, and 96 unique farmer and remote advocacy groups supported it. In particular, the Act improves farmers’ ability to seek redress if they have been wrongfully denied loans and expands their access to credit from the USDA. The Act may be passed separately, but it is more probable to be included in the Farm Bill. &# 13,
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The bill would precisely enact a two-year, interest-free direct loan payment deferral. Given that the conflict in Ukraine and COVID-19 have disrupted supply chains and raised the price of seed, fertilizer, and another inputs, giving farmers a break from making loan payments would benefit them. &# 13,
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The seven-year eligibility requirement for receiving operating loans is even lifted by the bill. If farmers are unable to obtain funding from private lenders, this ensures that the USDA serves its real function as lender of last resort. &# 13,
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Racial injustice is also addressed by the Act. &# 13,
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For those who the USDA considers historically underrepresented borrowers, the Act, for instance, waives guaranteed loan fees and upfront payments made at closing. Farmers of color, newcomers with minimal resources, and seasoned farmers and ranchers make up this group. Additionally, it offers” just relief” if a farmer received an unfair loan denial. &# 13,
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In another words, a farmer can seek monetary redress if they can demonstrate that they were badly denied funding from the USDA. The Act also increases transparency by requiring government agencies to provide justifications for denials of loans, especially for farmers making less than$ 300,000 annually. &# 13,
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The USDA has come to be associated with discrimination against farmers of color. These provisions give farmers the power to seek redress in the event of wrongdoing while also establishing the integrity of the government. &# 13,
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I can just imagine what farmers of color and young farmers go through because of the stress that my family went through with our loan. In order to prevent further undue stress on our country’s most resilient food producers, our legislators should also recognize the need for credit reform and include the Fair Credit for Farmers Act in the Farm Bill. &# 13,
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This column was written and published by Tribune News Service for Progressive Perspectives, a publication of The Progressive magazine. &# 13, The Fair Credit for Farmers Act may provide some relief from one of farming’s biggest problems, which is finding wonderful loans.
Fair Credit for Farmers Act can help farmers find loans.
We bet the farm—in a way.. . In the 1980s, when my family was looking to grow our dairy farm, we took out a loan from a local bank to fix some calf pens and add a few others. Our 200 acres served as collateral.. . Luckily, our bet paid off. We eventually made enough from milk checks to pay back the loan.. . Many others were not so fortunate, with the collapse of grain markets and rise in interest rates leading farmers to default on loans and enter bankruptcy as the 1980s Farm Crisis unfolded. While we do not have data from 1980 to 1986, in 1987, even as the crisis was winding down, the bankruptcy rate was 23.05 per 10,000 farms—the highest rate ever recorded.. . Farmers of color have had it worse. Congressional investigations in the 1990s uncovered how United States Department of Agriculture (USDA) officials denied loans to Black farmers, for decades, for no other reason than the color of their skin. The resulting Pigford v. Glickman class action settlement paid over $2 billion in damages.. . Finding decent credit remains challenging in the profession. According to a National Young Farmers Coalition survey, being unable to secure a loan to acquire land is the principal barrier facing people who want to enter, as well as remain, farming.. . Such matters make the Fair Credit for Farmers Act so critical. This bill was introduced as H.R. 5296 by Representative Alma Adams, Democratic of North Carolina, and S. 2668 by Senators Kirsten Gillibrand, Democrat of New York, and John Fetterman, Democrat of Pennsylvania, and endorsed by ninety-six different farmer and rural advocacy groups. Specifically, the Act increases farmers’ access to credit from the USDA and improves how they can seek redress if they have been unfairly denied loans. While the Act could be passed on its own, it’s more likely to become part of the Farm Bill.. . Specifically, the bill would enact a two-year, interest-free direct loan payment deferral. Giving farmers a break from making loan payments would help them as the war in Ukraine and COVID-19 has disrupted supply chains, causing the cost of seed, fertilizer, and other inputs to rise.. . The bill also removes the seven-year limit on eligibility to receive operating loans. This ensures that the USDA functions according to its true purpose—as lender of last resort—if farmers cannot find financing from private lenders.. . The Act also addresses racial injustice.. . For instance, the Act waives guaranteed loan fees, up-front payments made at closing, for who the USDA considers historically underserved borrowers. This group includes farmers of color, and beginning, limited resource, and veteran farmers and ranchers. It also provides “equitable relief” if a farmer had been denied a loan unfairly.. . In other words, if a farmer can prove that they have been unfairly denied financing from the USDA, then they can then seek financial redress. The Act also improves transparency by mandating that government agencies detail the reasons for denying loans, particularly for farmers who earn less than $300,000 a year.. . The USDA has become synonymous with discrimination for farmers of color. These provisions empower farmers by providing a means to seek redress in the event of wrongdoing as they also make authorities honest.. . From the stress that my family experienced with our loan, I can only imagine what farmers of color and young farmers endure. Our legislators too should recognize the need for credit reform and include the Fair Credit for Farmers Act in the Farm Bill so that our nation’s most vulnerable food producers are not subject to any more undue stress.. . This column was produced for Progressive Perspectives, a project of The Progressive magazine, and distributed by Tribune News Service.
