The Farm Bill remains one of the most significant pieces of legislation affecting American agriculture, rural communities, and agricultural finance. Although Congress has repeatedly extended the 2018 Farm Bill, lawmakers continue to work toward a comprehensive replacement commonly referred to as “Farm Bill 2.0.” Recent House and Senate proposals demonstrate a strong emphasis on strengthening the agricultural safety net, modernizing federal credit programs, and expanding financing opportunities for rural America. These provisions have direct implications for the Farm Credit System, the nationwide network of borrower-owned lending institutions that serve farmers, ranchers, agribusinesses, rural consumers, and rural infrastructure providers.

The current legislative environment reflects both economic pressure and political urgency. Producers continue to face high interest rates, elevated input costs, volatile commodity markets, and weather-related risks. While Congress has enacted some agricultural provisions through separate legislation and budget reconciliation measures, many stakeholders argue that important elements of a comprehensive Farm Bill remain unfinished. Farm Credit organizations have therefore advocated for passage of a new five-year Farm Bill that provides certainty and stability for agriculture and rural communities.

A key component of the proposed Farm Bill is the modernization of agricultural credit programs. Several proposals would increase Farm Service Agency (FSA) direct and guaranteed loan limits to better reflect current farmland values and production costs. According to summaries circulated within the Farm Credit System, proposed legislation would significantly increase farm ownership and operating loan limits while expanding eligibility for beginning farmers and new agricultural enterprises. These changes are designed to improve access to capital, particularly for producers who may struggle to secure sufficient financing under existing loan caps.

The Farm Credit System has a particularly important role in these reforms because many FSA guaranteed loans are originated and serviced by Farm Credit associations. Higher guarantee limits allow Farm Credit institutions to support larger and more complex agricultural operations while reducing risk exposure through federal guarantees. Internal Farm Credit discussions have emphasized that modernized FSA programs would help lenders provide additional credit to young, beginning, and small farmers who often have limited equity and collateral.

Another significant feature of the proposed legislation involves direct updates to Farm Credit System authorities. Senate proposals described as Farm Credit System Modernization provisions would broaden the System’s ability to finance rural infrastructure projects, including waste management facilities, energy production projects, and other rural development initiatives. The legislation would also expand lending eligibility to support emerging sectors such as aquaculture and aquatic harvesting operations. These changes recognize that today’s rural economy extends beyond traditional crops and livestock production and requires access to capital across a broader range of industries.

The proposed Farm Bill also seeks to strengthen risk management and financial discipline within the Farm Credit System. Legislative drafts include safeguards such as investment restrictions and borrower concentration limits intended to prevent excessive exposure to individual borrowers or sectors. At the same time, proposals would reform agricultural export financing by requiring cooperative banks to guarantee or insure a substantial portion of certain large export loans. Supporters argue these measures balance expanded lending authorities with prudent risk management practices.

Beyond credit issues, Farm Credit strongly supports broader Farm Bill provisions that strengthen crop insurance, conservation programs, rural infrastructure development, and the farm safety net. Farm Credit leaders have repeatedly emphasized that effective commodity programs, crop insurance, and disaster assistance help stabilize farm income, thereby improving borrowers’ ability to repay loans and maintain financial health. Sound agricultural policy reduces lending risk while ensuring producers have the resources necessary to remain viable during periods of economic stress. This is critical to maintain and sustain GreenStone’s cooperative mission.

The legislative process remains uncertain. The House passed the Farm, Food, and National Security Act of 2026, including several Farm Credit priorities and expanded authorities. More recently, the Senate Committee on Agriculture, Nutrition and Forestry voted to advance the Agricultural Act of 2026 out of committee, an important step toward advancing a complete, five-year Farm Bill this year. The proposed Farm Bill represents far more than an agricultural spending package. It is a comprehensive policy framework that influences farm profitability, rural economic development, and access to credit. For the Farm Credit System, the legislation offers opportunities to expand lending authorities, modernize federal guarantee programs, and better serve a changing rural economy.

 

To view the article in the online 2026 Fall Partners Magazine, click here.