Our Position

Rural America and Farm Bill Programs

Position

  • The 2023 Farm Bill should continue to provide essential assistance to the farm sector and to rural America. Robust price support programs provide a financial safety net for many producers during times of low commodity prices.
  • The new Farm Bill should maintain a strong crop insurance program, a successful public-private partnership critical to the ability of farmers and ranchers to survive weather-related disasters and repay farm loans.
  • USDA farm loan guarantee programs benefit family farmers and ranchers and allow community banks to better manage the lending risks of producers who would otherwise be unable to obtain commercial credit. These programs should remain primarily financially geared to establishing successful farm and ranch operations. Program fee levels should not discourage participation by community bank borrowers and should not be set at levels that overfund government collections.
  • Farmer Mac should continue to focus on its primary mission of improving secondary market access for community banks. ICBA opposes allowing the Farm Credit System to operate their own secondary market independent from or in competition with Farmer Mac.
  • Climate risk policies should not increase regulatory or economic burdens, particularly for small businesses, agricultural producers, or the community banks that serve them.

Background

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.

Staff Contact

Mark K. Scanlan

SVP, Agriculture and Rural Policy

ICBA

[email protected]

Agriculture News

ICBA supports bill to establish USDA Express loan program

Oct. 11, 2023

ICBA expressed support for a recently introduced House bill based on an ICBA proposal to speed up approval times for USDA loans and thereby enhance access to credit in rural communities.

Details: The USDA Express Loan Act (H.R. 5877), introduced by Reps. Brad Finstad (R-Minn.) and Angie Craig (D-Minn.), would create a new loan guarantee program in which borrowers hear back from the USDA within 36 hours of submitting an application. The legislation, which ICBA is advocating for inclusion in the pending 2023 farm bill, would cap loans at $1 million with a 50-75% guarantee, as ICBA proposed.

Background: ICBA testified before Congress on the proposal earlier this year. Testifying before the Senate Agriculture Committee’s subcommittee on commodities, Verlin “Gus” Barker of First Community Bank in Newell, Iowa, said the ICBA-proposed USDA Express program would improve access to timely credit for family farmers and ranchers.