Bill to assist beginning farmer to acquire his or her own farm.
This act required the U.S. Department of Agriculture’s (USDA) Farm Service Agency (FSA) to target a percentage of its direct and guaranteed farm operating and farm ownership loans to beginning farmers and ranchers. In 1992, the average age of farmers had increased to 52 years of age. Twice as many farmers were 60 or older as were under the age of 35. The increased cost of farming since the 1970s and the farm crisis of the 1980s had washed many younger farmers out of the business.
To get the loans, the beginning farmer had to draw up a detailed 10-year plan of action for his or her farm. Once the USDA Farm Service Agency approved the plan, new farmers became eligible for direct, subsidized, operational loans from the FMHA for 10 years and federal loan guarantees for the next 5 years. After 15 years, these farmers became ineligible for the program. The federal government took up liability for 80 to 90 percent of these loans if they were defaulted on.
Another minor change in the law allowed banks, rather than the Farmers Home Administration (FmHA), to decide which farmers met eligibility requirements for this program. Members of Congress believed that this would get money to the farmer faster. The bill also called for special efforts to make loans more available to those who are “socially disadvantaged,” including women.
