By Wayne Maloney, Farm Service Agency
Credit is the lifeblood of agriculture, and a top USDA loan official talked about the importance of the Farm Service Agency to a large audience of lenders, crop insurance professionals, journalists and producers at the 2017 Agricultural Outlook Forum. FSA Farm Loan Programs Deputy Administrator Jim Radintz discussed FSA’s role as part of a distinguished panel at the recent USDA Ag Outlook Forum in Crystal City, Virginia.
In his presentation he said that while FSA loan share is only about 6.4 percent of the total market, its programs are critical to the economic health of farms and rural communities, and its portfolio totals a sizable $23 billion. For example, said Radintz, 16-18 percent of midsize farms are dependent to some extent on FSA loan programs and for large farms the number is 12 percent.
As the market has matured, the make-up of FSA’s borrowing pool has changed. The “vast majority” of FSA direct lending is now directed to beginning farmers, and a surprising 40 percent are cow and calf operations. A majority of the guaranteed loan borrowers are in crop production (especially commodity crops).
Significant numbers of the borrowers rely on off-farm income: They have non-farming jobs which bring money into their operations. “We have to acknowledge how closely the rural economy is tied to the farm economy,” said Radintz.
He and the other panelists noted that while delinquencies have increased recently, actual farm bankruptcy rates remain low, and part of that is due to the open and frank relationships many producers enjoy with lenders and with the Farm Service Agency.