Bill Summary
The "Farm Ownership Improvement Act" is a legislative proposal aimed at enhancing access to direct farm ownership loans for farmers and ranchers. It requires the Secretary of Agriculture to establish a five-year pilot program to develop a pre-qualification or pre-approval process for these loans under the Consolidated Farm and Rural Development Act. Key components of the bill include:
1. **Pilot Program Establishment**: The Secretary must create a pilot program within two years of the bill's enactment, focusing on evaluating the financial viability and repayment likelihood for loan applicants using alternative methods, such as financial benchmarking.
2. **Outreach**: The program emphasizes outreach to organizations that work with beginning farmers and ranchers to ensure that these groups are informed and can participate effectively.
3. **Evaluation and Reporting**: The Secretary is tasked with continuously evaluating the program and submitting annual reports to relevant congressional committees that detail performance outcomes, participant demographics, and recommendations on whether the program should be made permanent.
Overall, the legislation aims to improve access to essential financial resources for new and existing farmers and ranchers, promoting agricultural sustainability and growth.
Possible Impacts
The "Farm Ownership Improvement Act" as described could have various effects on people, particularly those involved in farming and ranching. Here are three examples:
1. **Increased Access to Financing for Beginning Farmers**: The establishment of a pre-qualification or pre-approval process for direct farm ownership loans could make it easier for beginning farmers and ranchers to secure funding. This could enhance their ability to purchase land and invest in their farming operations, leading to increased agricultural production and potentially fostering a new generation of farmers.
2. **Improved Financial Assessment Methods**: By allowing the Secretary of Agriculture to use alternative methods for assessing borrower viability and repayment potential, the pilot program could lead to more accurate evaluations of applicants. This could benefit financially stable farmers who may have unconventional financial profiles, allowing them access to loans they might otherwise be denied. Consequently, this may also help reduce the risk of default, benefiting the lending system as a whole.
3. **Targeted Outreach and Support**: The emphasis on outreach to organizations that engage with beginning farmers and ranchers could result in more tailored support and resources for those groups. This could include educational programs about financial management and loan application processes, which would empower new farmers with the knowledge and tools necessary to succeed. Additionally, such outreach could foster a sense of community and collaboration among new and established farmers, enhancing the agricultural sector's overall resilience.
[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[S. 910 Introduced in Senate (IS)]
<DOC>
119th CONGRESS
1st Session
S. 910
To require the Secretary of Agriculture to establish a pilot program to
implement a pre-qualification or pre-approval process for farmers and
ranchers with respect to a direct farm ownership loan under the
Consolidated Farm and Rural Development Act, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
March 10, 2025
Mr. Welch (for himself, Mr. Hoeven, and Ms. Smith) introduced the
following bill; which was read twice and referred to the Committee on
Agriculture, Nutrition, and Forestry
_______________________________________________________________________
A BILL
To require the Secretary of Agriculture to establish a pilot program to
implement a pre-qualification or pre-approval process for farmers and
ranchers with respect to a direct farm ownership loan under the
Consolidated Farm and Rural Development Act, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Farm Ownership Improvement Act''.
SEC. 2. DIRECT FARM OWNERSHIP LOAN PILOT PROGRAM.
Subtitle D of the Consolidated Farm and Rural Development Act is
amended by inserting after section 374 (7 U.S.C. 2008i) the following:
``SEC. 375. DIRECT FARM OWNERSHIP LOAN PILOT PROGRAM.
``(a) Establishment of Pilot Program.--Not later than 2 years after
the date of enactment of the Farm Ownership Improvement Act, the
Secretary shall establish a 5-year pilot program (referred to in this
section as the `pilot program') to implement a pre-qualification or
pre-approval process for farmers and ranchers with respect to a direct
farm ownership loan under subtitle A.
``(b) Borrower Viability and Repayment Assessment.--In carrying out
section 360(b) with respect to a participant in the pilot program, the
Secretary, as the Secretary determines to be appropriate, may make use
of alternative methods, including financial benchmarking, to reliably
evaluate the financial viability of the participant and the likelihood
of repayment of the applicable loan.
``(c) Limitation.--This section shall not be interpreted to repeal
any borrowing requirement imposed under subtitle A.
``(d) Outreach Priority.--In conducting outreach relating to the
pilot program, the Secretary shall prioritize outreach to organizations
that have demonstrated engagement with beginning farmers or ranchers.
``(e) Evaluation and Reports.--The Secretary shall--
``(1) evaluate the pilot program on an ongoing basis; and
``(2) annually submit to the Committee on Agriculture,
Nutrition, and Forestry of the Senate and the Committee on
Agriculture of the House of Representatives a written report
that includes--
``(A) a description of the performance outcomes of
the pilot program, including stakeholder and
participant evaluations, assessments, and participation
demographics, that includes the information described
in section 5413(b)(1)(A)(iv) of the Agriculture
Improvement Act of 2018 (7 U.S.C. 2008x(b)(1)(A)(iv));
and
``(B) a recommendation as to the value of the pilot
program, including whether to authorize a permanent
program modeled on the pilot program.''.
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