Final Farm Bill Analysis Paper Released

Analysis looks at key factors that will affect future growth in U.S. agriculture.

Published on: Sep 13, 2006

USDA completed its final paper laying out alternatives the public and policymakers may consider as the country contemplates future farm policy. The latest installment, "Strengthening the Foundation for Future Growth in U.S. Agriculture," focuses on options new farm policy provides for the next generation of farmers and agricultural members.

Johanns outlined key factors that will affect future growth in U.S. agriculture: international trade, research and development, protection of agriculture from pests and diseases and challenges in preparing the next generation of farmers.

The paper outlined a number of ways to aid beginning farmers:

Facilitating the transfer of farms to new and beginning farmers. Options include providing young farmers access to affordable capital necessary to fund farm acquisitions. Examples include increasing loan limits on USDA's operating and farm ownership loan guarantee programs and providing flexible repayment schedules and

Reducing reliance on direct loans. Young and beginning farmers rely heavily on direct lending, which has high administrative and loan subsidy costs. Incentives could be considered which encourage lenders to make greater use of the guaranteed program in financing young farmers.

Johanns explains that capital is a significant hurdle beginning farmers face. Currently the ceiling on direct and guaranteed loans is set at $200,000 and hasn't been raised since 1984. Raising the level may allow additional farmers the opportunity to acquire more land and remain competitive.

Providing research, education, and outreach to address the needs of farmers in transition. Many socially disadvantaged, limited resource, and small and beginning farmers may lack technical expertise to achieve financially sound farming operations.

Enhancing benefits under USDA risk management programs. Financial enhancements may be considered for beginning or young farmers under USDA's risk management programs.

All of the farm bill analysis papers can be found at www.usda.gov/farmbill.