Legislation will reform FSA loans to create long-term payoffs that strengthen rural communities across America  

WASHINGTON, D.C. – U.S. Senator Peter Welch (D-Vt.), Ranking Member of the Senate Agriculture Subcommittee on Rural Development, Energy, and Credit, this week joined U.S. Senators Kirsten Gillibrand (D-N.Y.), John Fetterman (D-Pa.) and U.S. Representative Alma Adams (D-NC-12) in reintroducing the bicameral Fair Credit for Farmers Act, bicameral legislation to strengthen financial security for agricultural producers. The lawmakers’ bill will improve access and accountability for the farm loan services offered by the U.S. Department of Agriculture’s Farm Service Agency (FSA) and strengthen borrower rights of the farmers and ranchers who feed America’s families. 

“Vermont farmers are facing challenges at every turn, from brutal flooding and drought to shifting markets and rising costs caused by Trump’s reckless economic policies. Those hardships are made worse when farmers have nowhere to turn to absorb losses without risking their farms. Working to eliminate financial barriers and expand access to FSA loans is essential to ensuring farmers facing hardship can get help when they need it most,” said Senator Welch. “Our bill will reform FSA loans to better meet the needs of farmers in Vermont, North Carolina, and across the country.” 

“New York’s farmers are the backbone of our Upstate economy, and they deserve fair, transparent credit opportunities as they do the critical work of feeding our communities,” said Senator Gillibrand. “For too long, family farmers and beginning farmers have been weighed down by administrative red tape and barriers that stack the deck against them. Our legislation will provide real relief for farmers and help ensure they have the protections and resources they need to thrive.” 

“The Fair Credit for Farmers Act offers relief to our small, mid-sized, and family farms, allowing them to compete with the growing corporate consolidation of agriculture,” said Rep. Adams. “Small-scale farmers are the backbone of North Carolina’s economy but falling commodity prices, the impacts of climate change, and the Trump trade war are making it harder for these farms to stay in business. My bill reforms FSA loans, making it easier for farmers to get farm credit and removing harmful barriers that have prevented underserved farmers from receiving the support they deserve.” 

Most family farmers rely on agricultural credit or loans to plant crops, invest in conservation, purchase livestock, replace old machinery, and navigate marketplace disruptions. FSA loans provided through USDA offer great potential to help farmers get their operations up and running. However, financial barriers and unfair FSA lending practices have put this vital resource out of reach for many family farmers. FSA has also been criticized for discriminatory lending practices and burdensome requirements that have harmed farmers of color.  

USDA estimates that farm debt will exceed more than $591 billion in 2025—higher than ever before. In the past decade, crippling debt caused by natural disasters has led to the closure of nearly half of Vermont’s dairy farms. More recent natural disasters like the brutal back-to-back floods in 2023, 2024, and 2025 have left many Vermont farms burdened with debt and with few options for relief. As farming operations in Vermont and across the country continue to face external shocks, farmers need new ways to help absorb losses without risking their farms and livelihoods. 

The Fair Credit for Farmers Act will improve access and accountability in the FSA loan application and appeals process for farmers. Specifically, the bill will: 

• Enact a targeted, two-year, low-interest payment deferment on direct farm loans and extend the term for repayment by two years to help farmers recover from recent market disruptions. To be eligible, farmers must be economically distressed. 

• Waive guaranteed loan fees for certain borrowers for two years, which can cost farmers much more in interest over time. 

• Limit over-collateralization on farm loans and protect farmers’ homes to a maximum of the full value of FSA loans and only allow farmers’ homes as the last option for collateral. Homes will also be the first collateral removed from the loan once enough has been paid.  

• Protect farmers in delinquency against FSA taking all of their assets as collateral, as well as from some lenders of guaranteed loans initiating liquidation without concurrence by FSA. 

• Better ensure that historically underserved farmers and ranchers receive equal treatment in FSA lending and appeal processes. 

• Ensure that farmers can refinance existing debt with FSA loans to better manage their debt and adapt to market and environmental changes or disasters.  

• Eliminate arbitrary FSA loan eligibility term limits for farmers who cannot access favorable credit options in the private sector. The bill would amend current FSA policy which restricts farmers to only seven years of loan eligibility for direct operating loans and only ten years for direct farm ownership loans, regardless of financial status.  

• Restore FSA eligibility for farmers with a previous debt write-down (or partial debt-relief).  

• Provide greater flexibility and improve access to the use of funds and credit reserved for beginning farmers. This provision would shorten USDA’s three-year experience requirement for direct loans to enhance loan access for new and beginning producers.  

• Expand equitable relief when FSA erroneously denies a farmer’s loan or program benefit to deliver economic support to farmers in situations where FSA’s error has financially harmed them, particularly if the farmer missed a planting season or market opportunity. It also makes equitable relief decisions appealable to the National Appeals Division. These provisions do not apply retroactively. 

• Improve transparency and fairness in the National Appeals Division (NAD) by requiring FSA to include all potential reasons for denial in its initial communication with the farmer to ensure that the farmer does not have to repeat the appeals process. This bill also shifts the burden of proof in NAD appeals to FSA when the farmer’s annual farm income is $300,000 or lower. 

The Fair Credit for Farmers Act is endorsed by the National Family Farm Coalition (NFFC) and the Rural Advancement Foundation International (RAFI). 

“Independent farmers and ranchers are facing extreme, often unpredictable financial challenges, including the highest level of farm debt in history. Improving transparency and fair access to the public loans offered by FSA must be a top priority to support the hard-working farmers that put food on our tables. The improvements made through the Fair Credit for Farmers Act will support farmers in confidently sustaining and growing their businesses, and their ability to remain resilient against the unique challenges of farming,” said the National Family Farm Coalition. 

“Farmers are navigating all types of uncertainty right now–whether that’s fluctuating costs and prices, changes at USDA, or increasingly frequent weather disasters. Farmers need FSA to be a lender where they can have a fair shot at accessing credit that makes sense for their businesses, and who will work with them when they hit hard times. The Fair Credit for Farmers Act directly addresses many of the barriers we’ve seen farmers encounter as we work with them to navigate those crises,” said Margaret Krome-Lukens, Policy Co-Director, RAFI. 

Read and download the full text of the bill. 

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