“Agriculture is Michigan’s second-largest industry,” said Peters, D-Michigan, “and our farmers not only raise world-class produce, crops and livestock, they also create jobs and contribute to our local economy.”
The bill, which Peters will introduce with Sen. David Perdue, R-Georgia, would ensure the U.S. Department of Agriculture’s Farm Service Agency (FSA) loan program can fulfill its commitments to already approved loan applications.
See more photos from Peters’ visit at the Tribune photo gallery.
In recent years, the program had reached its cap well before the end of the fiscal year and could not provide approved loans to farms until Congress raised the caps. The FSA Loan Flexibility Act will provide greater flexibility to its loan program to provide support to farms during periods of high demand. There are currently more than 2,300 Michigan farms with FSA loans totaling more than $630 million.
“Without FSA financing, farmers in Michigan and across the country could lose their ability to purchase land, equipment and other necessities, and could be forced to curtail operations — costing them time and money,” Peters said. “This bipartisan bill will ensure the FSA loan program can continue to meet higher demand so farmers can focus on a successful harvesting season, and agriculture can continue being among the largest engines of economic growth in Michigan.”
Paul Windemuller, owner of Dream Winds Dairy Farm, said he was thankful for Peters’ support of the Michigan agriculture industry and for visiting his farm on Friday.
“Thanks to the Farm Service Agency, Dream Winds Dairy has grown exponentially with a new barn and additional cows to provide Michiganders locally sourced, quality dairy products,” he said. “As technological advances continue to change farm operations, the success of the FSA loan program will become even more critical for the long-term success of farms like ours.”
The FSA provides direct loans and loan guarantees to beginning farmers, women and minorities, and other disadvantaged borrowers who are unable to obtain assistance from private banks. The agency’s operating loans can be used for expenses such as livestock, equipment and seed, while ownership loans help farmers develop land.
In recent years, there has been increased demand for FSA’s loan programs, as net farm income has significantly declined since 2013. In June 2016, more than 3,000 loans that had already been approved could not be funded for several months due to a shortfall in funding for FSA operating loans, leaving farmers without necessary financing. As a result, Congress was forced to pass an emergency appropriation in December 2016 to address the shortfall.
“Access to credit is absolutely critical to ensure a strong agriculture sector in Michigan and throughout the nation, and the Michigan Agri-Business Association fully supports this effort to ensure FSA has the flexibility it needs to properly serve farmers,” said Jim Byrum, president of the Michigan Agri-Business Association and a former FSA state executive director. “By modernizing, improving and providing more commonsense flexibility for FSA’s loan programs, the bill introduced by (Peters and Perdue) will provide certainty for those who rely on FSA loans while ensuring a pathway into agriculture for new and beginning farmers.”