Ag Lending Crisis Averted with Budget Patch
All available ag lending money the government had was given out to farmers during the last fiscal year to help them through the worst economic downturn in decades. An Associated Press article says, despite that, no one who qualifies for a farm loan will be turned down over the next four months, thanks in part to an unusual item recently passed by Congress. The budget patch gives the U.S. Department of Agriculture the wherewithal to meet an expanding demand for farm loans by using future funding.
USDA lending has no limit between now and April 28, which is a victory for farm groups who had been urging Washington to head off a potential ag lending crisis. Crop and livestock prices are pushing the nation’s farmers to the limit, and producers are turning to lenders for help in staving off disaster. The increasing demand pushed the Farm Service Agency to wind up $137 millions dollars short in direct and guaranteed loan funds through the end of the most recent fiscal year.
The American Bankers Association Center for Agriculture and Rural Banking expects most producers to be able to hold on at least one more year because bankers can restructure their loans and add in some federal guarantees to commercial loans as well.
Source; NAFB News