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The USDA reports net farm income should increase by almost $20 billion from 2021 to $160.5 billion in 2022. Rural America and farm and ranch families have benefitted from low interest rates, ample energy supplies, and a de-regulatory environment. These positive factors have changed quickly, threatening the outlook for American agriculture. Congress should adjust farm programs to allow producers to manage a changed economic environment.
Congress is expected to draft and possibly finalize a new Farm Bill in 2023. The new Farm Bill should build upon the success of the 2018 Farm Bill, which expires September 30, 2023. The next Farm Bill should continue to strongly support Farm Bill provisions which are intended, in part, to provide lenders and customers a long-term policy framework for business and planning purposes and bolster the farm economy.
The Federal Crop Insurance Program (FCIP) plays a prominent role in helping producers manage financial risk, cope with weather related disasters and repay bank loans. In 2022, more than 490 million acres of farmland (90% of insurable farmland) were protected. ICBA opposes reducing spending on crop insurance.
USDA's guaranteed loan programs allow community banks to lend to higher-risk borrowers by guaranteeing 90 percent of loan repayment. Congress should increase loan limits to at least $1.75 million to allow banks to work with more family farmers. Funding set-asides should not interfere with expanding the program’s borrower base.
The 2018 Farm Bill increased population limits for rural development loans and requires most programs to be self-funding. These program changes should be evaluated.
Farmer Mac. Farmer Mac, the secondary market program for ag real estate loans, should continue to focus on improving secondary market access for community banks.
Climate Risk. Policies should not increase regulatory or economic burdens on the agricultural or community banking sectors, should be voluntary, based on scientifically sound data, and offer incentives to establish healthy soil and water resources.
May 12, 2023
ICBA expressed its strong support for the House introduction of legislation to exempt from taxation interest income on farm real estate and rural mortgage loans.
ACRE Act: Authored by Reps. Randy Feenstra (R-Iowa) and Wiley Nickel (D-N.C.), the Access to Credit for our Rural Economy (ACRE) Act (H.R. 3139) would provide relief for loans secured by agricultural and aquaculture real estate or by rural single-family homes that are the borrower's principal residence.
Give lenders a strong incentive to remain in the rural farming and housing markets, thereby boosting local economic activity.
Offer community banks greater flexibility to work with farmers who may have trouble servicing their debt.
Assist those seeking to remain on the farm or acquire a home loan in rural communities by providing borrowers with more competitive rates and loan terms.