Federal News

USDA Expands Access to Capital for Rural Businesses

USDA Rural Business-Cooperative Service Administrator Sam Rikkers today unveiled new rules to expand access to capital for rural businesses.   "Access to capital is one of the most important needs for businesses," Rikkers said. "USDA is partnering with the Treasury Department and other agencies to ensure that rural businesses have the resources they need to prosper and grow. The regulatory changes I am announcing today will help businesses expand their operations and create jobs."  The changes make it easier for rural businesses to qualify for loans in USDA's Business and Industry Guaranteed Loan Program.  They allow businesses to use the Mew Markets Tax Credit as a form of equity, and allow, for the first time, employees of a business to qualify for loan guarantees to purchase stock in a business by forming an Employee Stock Ownership Plan or worker cooperative. Other improvements include: New, loan application scoring criteria, including priority for loans to businesses that will create quality jobs, such as those with health care benefits; Reduced paperwork requirements to refinance loans; Strengthened eligibility criteria for non-regulated lenders (such as privately owned finance companies) to participate in the B&I program; Expanded loan eligibility, including in urban areas, for projects that process, distribute, aggregate, store and/or market locally or regionally produced foods.

The stock ownership provisions are modeled after rural cooperative businesses. Co-ops have been economic development partners with USDA for decades.

While everyone was paying attention to Zika, a much deadlier mosquito-borne virus began to spread

While the Zika outbreak was dominating the headlines, another mosquito-borne virus has taken hold in Africa: yellow fever. And with the large population of migrant Chinese workers in the affected area, scientists worry the disease could unleash its first outbreak in Asia. The authors of a recent paper called the current situation "unprecedented in history," writing that it is "critical" to assess the risk now and act quickly "so that a global catastrophe can be averted."  Yellow fever causes 180,000 cases and 78,000 deaths in Africa per year. It's spread throughout tropical areas of Africa and South America (where cases only number around a hundred per year) by the Aedes aegypti mosquito.

Groups worry FSA may run out of funds for loan guarantees

Farmers and ag lenders relying on Farm Service Agency direct loans or guarantees could see those loans delayed this summer as demand is quickly draining available funds.  Several ag groups are sending a letter to members of the House and Senate appropriations committees highlighting the escalating demand for these loan programs and pointing out the USDA's Farm Service is expected run out of funds later this month for direct operating loans and guaranteed operating loans. Roughly $650 million in potential farmer loans could be delayed.  "This substantial shortfall will leave many beginning farmers and others who cannot be fully serviced by commercial credit under current price conditions without the loans they need to stay in business," the letter states. Additionally, there will be a backlog and waiting list for the same kind of loans and loan guarantees for FSA's 2017 fiscal year.  Increasingly farmers are turning to FSA for loans and ag lenders are turning to the agency to guarantee loans. An FSA spokesman told DTN the agency has seen 23% more applications for operating loans this year. Funding obligations for those loans are also up 19% from last year. Additionally, demand for FSA guaranteed real estate loans is up 27%.  ate loans is up 27%.

Battle Reignites Over Proposed GIPSA Rules

USDA, livestock producers and Congress could find themselves in a race to see whether the Obama administration is going to dramatically overhaul rules under the Packers and Stockyards Act this year or face another appropriations rider that would block such action.

Based on Congressional hearings over the past few days in both the House and Senate, leaders of some livestock groups are upset that the proposals are being revived in USDA's Grain Inspection Packers and Stockyards Administration.  USDA came out with a statement after some members of the House Agriculture Committee and livestock groups criticized the department's agenda regarding different provisions that highlighted major livestock industry rifts when they were first debated in 2010. USDA stated Congress should not return back to policy riders in appropriations bills to try to block the changes.

USDA stated, “Any efforts to once again block GIPSA’s rules to ensure fair treatment of livestock and poultry growers are not acceptable to this Administration, and do not look out for the best interests of America’s farmers, ranchers and rural communities. The incessant GIPSA rider demonstrates a complete lack of concern for honest, hardworking families. Maybe some people don’t remember the hardships recently suffered by our farming families in 2008 and 2009 when producers in Arkansas, Alabama, Florida, Georgia, Louisiana, North Carolina, Pennsylvania, Tennessee and Texas lost millions of dollars and their livelihoods when just one of the major poultry businesses went under. The focus should be on how to ensure a fair marketplace and a level playing field for our farming families—nothing less. Just ask the American Farm Bureau Federation, the National Farmers Union and the National Sustainable Agriculture Coalition—groups that represent our farmers—and you’ll hear that this GIPSA rider is bad for family farmers, bad for the agriculture industry and bad for our rural communities. Everyone deserves a level playing field. Everyone deserves a fair shot.”