In order to meet stronger-than-expected demand, the USDA will tap a $500-million discretionary fund so it can continue to issue loan guarantees for farm ownership, reported Agri-Pulse. Congress allotted $2 billion for the guarantees for this fiscal year but sharply lower farm income has prompted banks to ask for more federal loan guarantees, said Agri-Pulse.
The USDA frequently has to switch to stop-gap funding as the Sept. 30 end of the fiscal year approaches, said a spokesman. Agri-Pulse said USDA notified Congress of the plan to use discretionary funds. Farm ownership loans are used to purchase land, construct or improve farm buildings, pay closing costs and promote land stewardship.
Early this month, eight banking and farm groups asked Congress to appropriate additional money for farm operating loans for this fiscal year.