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Summary:
The federal government has a long history of providing credit assistance to farmers by issuing direct loans and guarantees, and creating rural lending institutions. These institutions include the Farm Service Agency (FSA) of the U.S. Department of Agriculture (USDA), which makes or guarantees loans to farmers who cannot qualify at other lenders, and the Farm Credit System (FCS), which is a network of borrowerowned lending institutions operating as a government-sponsored enterprise. The 2007 farm bill offers Congress opportunities to address agricultural credit. The House-passed farm bill, H.R. 2419, includes several adjustments to the FSA loan program, but denies expansion of FCS lending authorities as originally proposed in the Agriculture Committee-reported bill. A floor amendment from leaders in the Financial Services Committee stripped the FCS expansion provisions, which had become particularly controversial. FCS is calling for expanded lending authority in their Horizons project, but commercial bankers have strongly opposed FCS expansion, citing no lack of credit in rural areas. Senate action is pending. This report will be updated.
