WASHINGTON, D.C. – U.S. Senator Gary Peters (MI), spoke on the Senate floor today on the need to preserve access to capital for small and disadvantaged farmers to start and grow their operations. This week, Peters introduced the Farm Service Agency Loan Flexibility Act, which will provide greater flexibility for the FSA loan program to provide loan and loan guarantees to farmers during periods of high demand. Below is video and text of his remarks as prepared for delivery:
“I rise today to honor Michigan’s farmers. Agriculture is a vital part of Michigan’s economy. Our state is home to more than 51,000 farms that contribute over $100 billion dollars to the nation’s economy.
“Michigan is also the second most diverse farm state in the nation, growing more than 300 commodities, including a significant portion of our nation’s milk, corn, cherries, cucumbers, and more. Michigan’s farmers – and farmers across our country – feed the nation and the world, and we must do what we can to support them. Our agricultural businesses rely on the ability to access the resources they need to keep growing, creating jobs, and contributing to our national economy.
“But access to these resources can be especially challenging for new small farm operations that are just getting started, including the small farms that make up 82% of Michigan’s agricultural producers. Small farms that are just starting out, or are facing tough economic conditions, sometimes struggle to secure affordable credit. These businesses rely upon the important services provided by the Farm Service Agency, which works with lenders to guarantee and deliver small-dollar loans to the small farms that need them most.
“Farm Service Agency loans and guarantees can help farmers cover urgent operating costs, like feed, seed, and fertilizer, to get them through the season. Without these loans, farmers could lose their ability to purchase equipment and other necessities for the planting season, and could be forced to curtail their operations. Currently, more than 2,300 farms in Michigan have Farm Service Agency loans, totaling over $630 million dollars.
“Across the country last year, the Farm Service Agency made and guaranteed almost 40 thousand loans totaling over $6 billion dollars. This program is in such high demand that, in 2016, the Farm Service Agency ran out of money to finance its operating loans. This included more than 1,000 loans that had already been approved.
“This led to a backlog, and farmers were forced to wait for months until Congress passed emergency funding to get the loans they needed for their day-to-day operations. Access to capital is critical across a range of businesses, but it is incredibly important for our farmers. They can lose out on entire growing seasons if they can’t buy the equipment and supplies they need while they wait on Congress to fund the Farm Service Agency.
“This year the FSA loan programs are again on track to exceed available funding, and if that happens farmers will again be stuck waiting on Congress to receive the loan they deserve. That is why I introduced bipartisan legislation this week with my colleague Senator David Perdue of Georgia to provide greater flexibility to the FSA loan program to continue serving farmers during periods of high demand.
“My bill, the Farm Service Agency Loan Flexibility Act, would allow the FSA program to increase its loan authority in years when the demand for loans unexpected exceeds the supply of funding. The legislation would enable FSA to increase the available loan funding by up to 25% for the fiscal year for self-funding loans and guarantees that do not require appropriation. It would also authorize FSA to increase the loan cap by up to 25% for FSA direct loans that require budget authority, and would allow FSA to draw stopgap funding for these direct loans from the Commodity Credit Corporation.
“I’m proud to have the support of the Michigan Farm Bureau, the Michigan Agri-Business Association, the American Bankers Association and the National Farmers Union, among others. Like our small businesses, students, and families, America’s farmers deserve to have affordable loan options, and they deserve our attention and support. I urge my colleagues to support the Farm Service Agency Loan Flexibility Act to help meet the financial needs of our farming communities, as they support and sustain us every day.”