WASHINGTON, D.C. – Senators Peter Welch (D-Vt.), John Hoeven (R-N.D.), and Tina Smith (D-Minn.) introduced the Farm Ownership Improvement Act, bipartisan legislation to help new and young farmers access the funding needed to purchase new land by establishing a pre-approval or pre-qualification process for loans secured through the USDA’s Farm Service Agency.
“Access to land is one of the most important—and expensive—factors to success for new and young farmers. USDA loans can help farmers mitigate these costs, but rising land values and an increasingly fast-paced real estate market often leave farmers unable to compete. We need a solution that ensures agricultural lending options meet the needs of underserved farmers and ranchers who often lack the connections needed to secure these crucial funds,” said Senator Welch. “Our bill streamlines access to USDA financing so that more young farmers and ranchers can access crucial funds to start and sustain their businesses.”
“Currently, approval for an FSA farm ownership loan can take up to six months to process, putting producers that utilize this program at a huge disadvantage when trying to purchase farmland,” said Senator Hoeven. “Our legislation directs FSA to create a pilot program to establish a pre-approval process for FSA direct ownership loans. Having a pre-approved FSA loan will enable farmers, including young and beginning producers, to act quickly when farmland becomes available and make them more competitive in the real estate market.”
“Farmers and producers are the backbone of Minnesota’s economy,” said Senator Smith. “This legislation would reduce barriers for purchasing land, repairing current operations, and building capital. Meeting farmers where they are and tearing down barriers that impede their success will keep our agricultural economy thriving.”
The Farm Ownership Improvement Act also requires USDA to provide Congress with an annual report on the pilot program’s performance outcomes and coordinate outreach with stakeholder organizations to spread awareness about the program. By offering a pre-qualification or pre-approval process to direct farm ownership applicants, FSA will help level the playing field for applicants seeking land, particularly among the next generation of farmers and ranchers.
The Farm Ownership Improvement Act is endorsed by the National Young Farmers Coalition, National Farmers Union, National Sustainable Agriculture Coalition, National Family Farm Coalition, and Rural Coalition.
“As first-generation ranchers, my husband and I were incredibly fortunate to have had a relationship with the sellers of our property. We were mentored in the early years of our business leasing the same property, which meant the seller was willing to be patient with the long and sometimes arduous process involved with getting FSA loan approval. However, not every beginning farmer has the luck we had buying from someone we had a great relationship with. With the current lack of an FSA pre-approval process, new farmers are at a huge disadvantage when buying land in competition with people who are able to access conventional mortgages or purchase in cash,” said Evanne Caviness, Associate Field Director for the National Young Farmers Coalition, and Colorado rancher. “This pilot initiative to allow the FSA to give farmers and ranchers a competitive edge in an increasingly challenging market will help save farmland from going out of production or being developed and will keep it where it belongs: in the hands of our country’s farmers.”
“I’ve built a viable business from the ground up on rented land, but my partner and I don’t have access to generational wealth or high-income careers to pivot from and pursue farming full-time,” said Michelle Week of Xast Sqit (Good Rain) Farm, greater Portland Oregon. “Traditional lenders don’t recognize our lifestyle or business model, so we don’t qualify for standard loans. In the Portland, Oregon metro area and SW Washington counties, land prices are increasing, and while retiring farmers want to pass their land to people like us, they can’t afford to wait. Several farmers have approached me, but I can’t access the capital fast enough to meet their financial needs to address health and relocation costs. With FSA Pre-Approval we’d be better positioned to make offers and purchase our forever farmland, supporting retiring farmers, continuing to nourish our communities and to better stabilize and grow our farm operations. It’s a win all around.”
“This bill is a great opportunity to strengthen USDA relationships with organizations already working with beginning farmers and ranchers. Access to land and credit are the main priorities for agrarian entrepreneurs and relying on their serving trusted organizations will secure the success of the pilot program,” said Antonio Tovar, Senior Policy Associate for the National Family Farm Coalition.
“Access to affordable land is essential for the success of all farmers, and it’s an especially pressing challenge for young and beginning farmers,” said Rob Larew, President of National Farmers Union. “NFU appreciates Senators Welch, Hoeven, and Smith for introducing the Farm Ownership Improvement Act. By piloting a new process for the USDA Farm Service Agency’s direct ownership loan program, this bill would help make the dream of owning farmland a reality for more of the next generation of family farmers and ranchers.”
Learn more about the Farm Ownership Improvement Act.
Read the full text of the bill.
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