The Farm Service Agency has released a new Fact Sheet about updates to various loan programs under the new Farm Bill. The changes in the Youth Loans are interesting and open the door to agricultural to many more individuals.
But before discussing the changes, what exactly are Youth Loans? Youth Loans are loans to individuals to establish and operate moderate sized projects that produce income in connection with participation in programs such as 4-H, Future Farmers of America, or similar programs. The project must be part of an organized and supervised program of work designed to provide practical business and education experience. Furthermore, the project must be planned and operated with the help of an adviser from the organization and produce sufficient income to repay the loan.
You need to be between 10 and 20 years old to qualify for a Youth Loan. The maximum loan amount is $5,000. The loan can be used to purchase livestock, seed, equipment and supplies; buy, rent, or repair needed tools and/or equipment; and pay operating expenses for the project.
What are the latest changes? First, Youth Loans no longer have a rural residency requirement. This means that a person otherwise eligible for a Youth Loan but who resided in Omaha is now eligible for a youth loan to assist with agricultural projects or business. With the growth of urban agriculture and interest in smaller operations, the elimination of the residency requirement is good news for encouraging even younger beginning farmers to enter the profession.
Second, debt forgiveness on Youth Loans will not prevent the borrower from receiving other federal loans. Importantly, this includes federal student loans. Further, if delinquent on a Youth Loan, a borrower is eligible for federal student loans.
If you have any questions about Youth Loans or FSA loans in general, you are welcome to contact us!
Farm Bill Update:
The last time we checked in with the Farm Bill, it was nearing passage in the House. A week later, where are we?
First, the Farm Bill did pass in the House and moved to the Senate. The Senate is advancing towards final passage of the Farm Bill today. The linked article also delves into details about the new crop insurance program and the consequences for farmers. Of note, the Farm Bill is passing with wide bipartisan majorities in both the House and Senate.
President Obama is expected to sign the Farm Bill.
Over the next few weeks, we will explore the new crop insurance programs included in the Farm Bill and the possible ramifications to your operation.
Other Possible News of Interest:
It is easy to conflate the government shutdown with the lack of passage of the Farm Bill. However, while the expiration of the Farm Bill and government shutdown occurred on the same date (October 1), they are, in fact, two separate albeit related issues. Lets go through the status of each:
There is not much more to say other than it continues. As of this writing, the Senate is hammering out a potential deal to re-open the government and extend the debt ceiling. The government shutdown continues to delay direct payments and other programs, as discussed previously.
The Farm Bill actually expired two years ago and, until October 1, a continuing resolution was in place. As of today, the House has named its conferees, in response to the Senate’s naming of conferees. There is some speculation that the Farm Bill could be part of a larger package to reopen the government. One of the few areas of agreement between the Senate-passed bill and House-passed bill is the reduction of crop insurance subsidies for high-income earners. Otherwise, for a complete run-down of the Farm Bill status, click here.
Well, the government shutdown continues, with the Farm Bill also stalled. What are the implications for agriculture?
As discussed in Tuesday’s post, the Farm Bill also expired Tuesday. What does that mean for farmers and ranchers?
We know that most USDA offices are closed during the shutdown. This means you cannot seek assistance from, for example, the Farm Service Agency or National Resources Conservation Service because the offices are closed. In pragmatic terms, this means items such as loan applications are not being processed by the Farm Service Agency. Direct payments may also be impacted. A list of programs that expired on October 1st and the implications is here.
Also, conferees have been appointed from the Senate to discuss the Farm Bill. The House has not yet appointed conferees. Conferees would allow the House and Senate to hold a conference committee in an attempt to resolve differences between the Farm Bills passed in the House and Senate respectively. When more information is available, we will update you.