FOR IMMEDIATE RELEASE
ICBA Voices Support for "Aggie Bonds" Bill
Legislation Would Help Beginning Farmers and Ranchers
Washington, D.C. (Feb. 8, 2005) - The Independent Community Bankers of America (ICBA), the nation's largest banking trade organization, today applauded the introduction of the "Agricultural Bond Improvement Act of 2005," which updates the tax-exempt "aggie bond" program.
The Aggie Bond Loan Program is a federal bonding program that offers affordable financing for qualified beginning farmers by securing a reduced interest rate on loans approved under the program. The changes to the program will help agricultural and rural bankers provide additional, affordable capital to new farmers and ranchers as they work to build their operations.
One important provision of the bill allows community banks to couple Farm Service Agency (FSA) loan guarantees with funds from tax-exempt agricultural bonds, thereby increasing the bank's lending capabilities to beginning farmers. In addition, the measure will increase the loan limits for agricultural bond funds from $250,000 to $450,000, indexed to inflation--a significant step, particularly in today's production agriculture environment, where larger and more complex operations are sometimes necessary in order to be competitive in a global marketplace.
In a letter this week, Camden R. Fine, ICBA's President and CEO, thanked Rep. Steve King (R-Iowa) for introducing this important measure. "This bill will help eliminate some of the hurdles that agricultural and rural bankers face in their efforts to help young and beginning farmers purchase farm land and build their operations," wrote Fine. "ICBA looks forward to working with you and other Members of Congress on this important measure."
"Aggie bonds" have been used since 1981 and are currently available in 25 states. Rep. King says his bill will help modernize the "aggie bond" program, which he hopes will lead to implementation in additional states so all beginning farmers can have access to this vital resource.