Key Senate leaders join effort to urge farm loan restructuring
While many Americans are feeling the impact of the current economic crisis, farmers face volatile commodity prices, rising production costs and tightening credit markets, resulting in a serious cash flow and credit crisis. Farmers depend on credit to cover the up-front costs of planting and harvesting their crops, for which they may not receive payment until the end of the year. These farm loans are essential to farmers, but in today’s uncertain economy they are also a tremendous risk. Because farmers are often required to place their family home as security against their farm loan, many farmers are in danger of losing not just their business but also their family home if they fall behind in their farm loans.
The farm loan restructuring plan mirrors requirements that are already in place on farm loans supported by the USDA Farm Service Agency and the requirements being developed for home loans under the Homeowner Affordability and Stability Program. It is similar to the 1987 Farm Credit Act, which had the support of Farm Aid and many of the organizations who support the current plan, and which kept thousands of farmers on their land during the farm crisis of the 1980s. This plan requires no additional funds from the federal government, and will, in fact, result in savings for taxpayers and the banks that hold these farm loans by preventing foreclosure. In addition, the plan will keep farmers on the land, protecting our food supply and the local and national economies that farmers support.
SOURCE Farm Aid