12 Financial Security for Agriculture

Financial security is crucial to agriculture producers, who face a multitude of risks each year as they work to bring their products to market. Consistent, reliable financial security policies, including Farm Bill programs and crop insurance, are necessary for producers who need to know the long-term viability of their operations. NASDA supports policies that seek to ensure the long-term viability of agricultural operations and assist future generations of agricultural producers.

12.1 Agricultural Credit

(Updated February 2016)

The availability of competitively priced credit is critical to the success of the American agriculture and food industries. The Farm Credit System (FCS) has a strong relationship with agricultural borrowers and agricultural enterprises that is built on a long history of mutual cooperation.

  • NASDA supports the critical and unique role FCS plays as a supplier of accessible, credit for U.S. farmers, ranchers and agribusinesses. In some regions, the FCS is even more critical, as it is the only provider of agriculture credit.
  • NASDA supports the continued cooperative ownership of the Farm Credit System and its status as a government sponsored enterprise; and supports maintaining the Farm Credit Administration as the System’s independent regulator.
  • NASDA believes Farm Credit should be provided with the authority to finance value-added enterprises that may be on-farm or off-farm investments.
  • NASDA supports raising the loan limits for the Business and Industry Guaranteed Loan Program to $300 million and waiving the population limits associated with the program when the applicant can demonstrate they provide a direct value-added service to agriculture.

12.2 Farm Income and Production Stability

Modern, comprehensive risk management programs are vital to maintaining an affordable, reliable food supply. Risk management encompasses commodity programs, marketing, and crop insurance programs. U.S. farm policy must balance the cost of agricultural production and need for a market-driven safety net, while finding innovative ways to support producers and provide a consistent, affordable food supply. NASDA encourages Congress and USDA to work with state departments of agriculture in the development and implementation of new products and programs.

  • NASDA believes federal policies should support and ensure farm profit viability and production stability.
  • NASDA believes financial tools that assist beginning and financially distressed producers should be developed and enhanced through federal, state, and private resources.

Farm Service Agency

  • NASDA encourages adequate funding for all FSA loan programs. NASDA supports wide access to FSA programs and encourages FSA to develop materials to help producers graduate to commercial credit.  
  • NASDA believes the FSA beginning farmer down payment program should be improved by extending the program's current loan amortization to 30 years. NASDA recommends removing "Aggie Bonds" from the individual state limits on bond volumes.

Risk Management

  • NASDA believes risk management tools must be flexible, comprehensive, and readily available to producers. Programs should allow for frequent updating of production data and utilize sound actuarial practices.
  • Crop and livestock insurance and disaster programs must complement one another to ensure adequate coverage for producers, while working with risk management programs.
  • In addition, the federal government should provide a commodity safety net in a manner that minimizes production distortion.

12.3 Agricultural Mediation Programs

Agricultural mediation programs are run by state departments of agriculture and are a confidential, accessible resource for producers who need dispute resolution. USDA was authorized to assist state mediation programs in 1987 and since then, these programs have continued to grow.

  • NASDA supports state mediation programs as a positive alternative to dispute resolution with USDA and encourages federal and state funding of these programs. NASDA emphasizes that mediation flexibility and confidentiality must be maintained.
  • NASDA supports the expansion of state mediation programs. NASDA urges the Secretary to authorize all agricultural disputes approved by individual state mediation programs as eligible under the USDA grant program.

12.4 Tax Provisions Affecting Agriculture

NASDA supports tax policies that protect and strengthen U.S. agriculture, promote the economic vitality of U.S. farmers and ranchers, reduce the tax compliance burden on agricultural producers, and facilitate access to competitive markets around the world.

NASDA identifies the following specific policy principles necessary to achieve these goals:

  • NASDA supports tax incentives for new beginning farmers and ranchers.
  • NASDA supports significantly reducing, or eliminating, the capital gains tax for agricultural producers and decreasing tax liabilities on capital investments.
  • NASDA recommends Congress establish Farm Savings and Retirement Accounts as a necessary management tool for U.S. farmers and ranchers.
  • NASDA supports elimination of the self-employment tax on income from rent of farmland, including CRP rents.
  • NASDA supports allowing farmers and ranchers to utilize the cash accounting method to deduct expenses as incurred.
  • NASDA supports the elimination of the estate tax for family farms and any policy that deters or impedes the successful transition of agricultural operations to the next generation of producers.
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