Hoeven Outlines Efforts to Expand Ag Producer Loans, Loan Gurantees to North Dakota Community Banks
FARGO, N.D. – At the annual convention for the Independent Community Banks of North Dakota today, Senator John Hoeven outlined his legislation, the Capital for Farmers and Ranchers Act, to raise the limits for loans and loan guarantees under the U.S. Department of Agriculture (USDA). Hoeven recently reintroduced the bill, which would increase the Farm Service Agency’s (FSA) loan guarantee amount from $1.39 million to $2.5 million and double the amount of direct loans from $300,000 to $600,000.
“Federal programs for our farmers and ranchers need to reflect the modern cost of agriculture, especially when facing drought and low commodity prices,” Hoeven said. “The Capital for Farmers and Ranchers Act helps ensure our ag producers can access credit when revenue is low. Further, by increasing the maximum loan guarantee to $2.5 million, this legislation allows farmers to work with their local banks to maintain their operations, while protecting these institutions from being saddled with too much risk during uncertain times.”
Hoeven’s legislation covers two types of loans and loan guarantees:
Farm Operating Loans – To purchase livestock, farm equipment, feed, seed, fuel, farm chemicals and insurance and to cover other operating expenses. It can also be used for minor improvements to buildings, costs associated with land and water development, family living expenses and debt refinancing in certain circumstances.
Farm Ownership Loans – To purchase farmland, construct or repair buildings and other fixtures, develop farmland to promote soil and water conservation and to refinance debt.
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