Rural America and Farm Bill Programs

Position

• The new 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 guarantees 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.
• Climate risk policies should not increase regulatory or economic burdens, particularly for small businesses, agricultural producers, or the community banks that serve them.

Background

Congress is expected to draft and possibly finalize a new Farm Bill in 2024. The new Farm Bill should build upon the success of the 2018 Farm Bill.

ICBA is aggressively advocating for rural community bank priorities, recommending six key principles for a new Farm Bill. These priorities include ample funding for commodity programs, rural broadband, and crop insurance. ICBA also advocates for higher USDA guaranteed loan limits, a USDA Express program (loan approval within three days of submission), and other program enhancements. ICBA strongly opposes expansion of the Farm Credit System into non-farm lending activities.

The next Farm Bill should continue to strongly support Farm Bill provisions which are intended, in part, to provide lenders and customers with 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. More than 490 million acres of farmland (90% of insurable farmland) are protected through various crop insurance programs. 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 $3 to $3.5 million to allow banks to work with more family farmers. Funding set-asides should not interfere with expanding the program’s borrower base. ICBA urges Congress to authorize a USDA Express loan program similar to SBA’s Express loan program but adjusted to fit agriculture’s needs. ICBA and other lender groups have submitted a set of joint proposals for Congress to consider for enhancing USDA loan programs.

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.