BISMARK, N.D. – Implications of a new farm bill are expected to draw attention at the North Dakota Credit Union League's Ag Lending seminar here November 6-7. Passage of the Farm Security and Rural Investment Act of 2002 earlier this year marked the first time the legislation has been reworked since 1995. Lenders in states like North Dakota, South Dakota, Minnesota and others are digesting the changes and what they mean to them. Gary Nelson, executive director of the North Dakota Farm Service Agency, will talk about the impact of the bill at the NDCUL meeting. "A basic knowledge of the bill is important so the lender can determine the effect it will have on their particular customers or members," Nelson says. The impact can vary, he adds, depending on the region of the country or even the specific area within a state and the crops involved. Subsidy levels differ for various crops. A farmer who received a loan from his credit union last year for a particular crop may have to decide how to deal with today's law as it alters issues such as "base acres" or "additional yields." "These all affect the amount of the subsidy, and these are the kinds of things I'm sure would interest a lender," Nelson says. An analysis posted on the U.S. Department of Agriculture's Web site mentions the following changes: * Eligibility time limits on Farm Service Agency direct and guaranteed farm operating loans can be waived for a period of time, and more farmers can qualify for FSA emergency loan financing. * Interest-rate assistance on guaranteed operating loans is made permanent, and annual authorized loan amounts increase. * Beginning farmer and rancher programs are enhanced. * Lending procedures are streamlined, including raising the threshold for which lenders can submit reduced documentation on loan guarantee applications. * Annual funding for FSA guaranteed and direct farm loan programs is set at $3.8 billion. The interest rate assistance program for guaranteed operating loans is made permanent and annual authority for the program rises from $490 million to $750 million. * Low-document loan processing on guaranteed loan requests is increased from $50,000 to $125,000. As always, Nelson suggests, a lender has to know the territory. "Agriculture is in a difficult period of time in North Dakota," he says. "Portions of our state had a major drought this growing season. We had one corner of the state that lost a good deal of crops due to too much rain. We had some other areas of the state where they had a fairly decent crop. "Prices have been improving all this year, and price levels are at a fairly decent level now. But for farmers they could always be better. The prices help those who have a crop, but do nothing for the person who experienced drought and didn't really have any kind of crop." Nelson believes most ag lenders have been exposed to the legislation and are working to get on top of the changes. Audrey Kroll, education/publications coordinator for the NDCUL, notes the ag lending conference was spun off from the league's regular lending meeting several years ago and has been growing. She indicates she's especially pleased to have Dr. David Kohl as a speaker at this year's session. Kohl is Professor of Agricultural Finance and Small Business Management and Entrepreneurship in the Department of Agriculture and Applied Economics at Virginia Polytechnic Institute and State University. He's also a facilitator of the United States Farm Financial Standards Task Force and a member of the Canadian Agricultural Financial Standards Task Force. -

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