Rural Credit Access

See ACRE’s Impact In Your State

What’s the current state of the agricultural economy?

Agricultural loans are essential to America’s economy, as they enable farmers and ranchers to support their businesses. Unfortunately, rising input prices and supply chain dynamics are driving up operational costs and hampering profitability.

America’s farmers and ranchers rely on loans to buy or refinance land and access to capital is particularly critical for young farmers, 69% of whom cite it as a top challenge. 

That’s why recent action—the passage of a modified version of the Access to Credit for our Rural Economy (ACRE) Act as part of the One Big Beautiful Bill— was a pivotal step toward easing the burden for farmers and ranchers. ACRE excludes from gross income 25% of the interest income derived from certain qualified real estate loans, which will:

  • Allow lenders to offer agricultural real estate loans at a lower rate;
  • Lower the cost of loans for farmers and ranchers; and
  • Increase competition in the agricultural credit market by offering alternatives to standard farm subsidies.

ACRE will help improve rural credit access, but outdated loan limits, limited funding, and regulatory barriers will continue to strain rural America. Fortunately, your lawmakers have an opportunity to modernize agricultural policy and deliver lasting credit access through the Farm Bill.

How can the Farm Bill help?

The Farm Bill is comprehensive legislation that shapes U.S. policy on agriculture and food programs, with a major impact on farming livelihoods. The Farm Bill should reflect the current needs of the agricultural economy while ensuring credit access is preserved by:

  • Raising Loan Limits for FSA Guaranteed Loans. The current loan threshold of $1.75 million does not reflect the current rising costs of operating a farm. Increasing the cap to at least $3.5 million for ownership loans and $2.5 million for operating loans will give farmers and lenders the flexibility they need.
  • Updating Beginning Farmers Programs. The modern farm structure continues to evolve, and Beginning Farmers and Ranchers (BFR) can often be left out of credit opportunities due to their structure. Less paperwork and the ability to use off-farm income will enhance BFR loan programs.
  • Upgrading FSA technology systems. Current loan processing technology is outdated, slowing approvals. Funding should be dedicated to modernizing the FSA’s system and streamlining operations.  
  • Ensuring parity under the CFPB’s Section 1071. The volume of data required by agricultural lenders to collect under 1071 could lead to competitive disadvantages. Regulatory parity across lenders is essential to preserve affordable credit access.

What can be done?

Congress has taken meaningful action by passing a modified version of ACRE and can gain even more momentum by addressing these issues in the Farm Bill. This will enable banks to meet the evolving needs of the agricultural economy and to provide affordable credit, so rural America can continue to thrive.