Farmer access to credit

Access to credit is a critical tool for food producers, particularly for family-scale farmers operating on razor thin economic margins. Most farmers take out annual operating loans to buy inputs like seeds, fertilizer and livestock in order to plant their crops and maintain their herds. Farmers who cannot access timely credit for operating loans face economic uncertainty that can threaten the viability and survival of their farms

The farm lending sector is full of risk, and is increasingly difficult to access. Competition from large agribusinesses, who have significantly more financial holdings, makes it challenging for independent producers to secure loans. Corporate competition combined with a lack of fair agricultural pricing standards, market disruptions from COVID 19, trade wars, and climate disasters have left US farmers with more debt than ever before - $500 billion in 2022.

The USDA Farm Service Agency (FSA) is known as the “lender of last resort,” and is relied on by many farmers and ranchers who are unable to access credit services from commercial lenders.  For many family scale operations, FSA is the only option and offers better terms than the private sector. 

Without basic farmer borrower protections, strong institutional oversight, and flexible lending terms, access to farm credit is too often an extractive relationship between farmers and lenders, rather than an essential service underpinning our rural economies. Farm lenders, including FSA, have long been criticized for unfair lending practices and burdensome requirements that, historically, have particularly harmed farmers of color. It’s crucial that farmers have strong credit protections and safeguards in place to protect their farms from predatory and discriminatory lending practices.

NFFC has been a leading force in securing reforms of FSA lending practices since the 1987 Agricultural Credit Act. Fair access to credit is one of our top policy priorities outlined in our 2023 Farm Bill Platform. We continue to fight for the proper servicing of USDA lending programs, a fair USDA appeals system for family farmers, and eradicating discriminatory lending practices at all USDA levels.

Fair Credit for Farmers Act 

The Fair Credit for Farmers Act will improve access and accountability for the farm loan services offered by the USDA’s Farm Service Agency (FSA) while strengthening farmer-borrower rights. These improvements will especially help to ensure that historically underserved farmers and ranchers receive equal treatment in FSA lending and appeal processes.