WASHINGTON – Dec. 13, 2010 – Agriculture Secretary Tom Vilsack today issued the following statement reminding participants in USDA’s Guaranteed Farm Operating Loan Program that the suspension of term limits on the program will expire on December 31, 2010, limiting the ability of some borrowers to continue obtaining credit in partnership with FSA:
“The expiration of the current waiver on term limits comes at a difficult time for many borrowers who have been affected by the unpredictable, cyclical nature of agriculture and its influence on farmers’ businesses. I understand the critical need to maintain a strong agricultural credit safety net for our hardworking farmers and ranchers. With thousands of family farmers across rural America facing the tightest agricultural credit markets in 20 years, USDA loan programs can mean the difference between surviving a tough year and losing the family business. USDA is supportive of the efforts in Congress to temporarily extend the current waiver. If successful, this effort will allow those family farmers who are faced with the term limit to continue to receive financial assistance from FSA that is critical to continuing their farming operations. It would also allow Congress to properly review the merits of term limitation during farm bill discussions.”
In the 2008 Farm Bill, Congress suspended enforcement of a 1992 law which limits the number of years a borrower can participate in FSA’s guaranteed operating poor credit programs. With the expiration of this suspension on December 31, the 1992 law will be enforced by USDA. In 2011, this will result in 4,200 borrowers, including 1,600 borrowers with current guaranteed farm operating loans through FSA, becoming ineligible for further loan assistance from USDA.
USDA continues to monitor the farm credit situation very closely. Borrowers who are imminently affected by a term limit on the Guaranteed Farm Operating Loan Program are being notified by mail.
If borrowers that are notified believe they need additional guaranteed operating credit before the end of this calendar year, they should contact their lender to discuss available credit options. If guaranteed borrowers that are notified have questions about term limits or how they are calculated, they should contact their local Farm Service Agency loan office.