September 22, 2000

Farm Service Agency Administrator Keith Kelly has proposed changes that are designed to streamline emergency farm loan requirements to make it easier for farmers to qualify and so that farmers will the loans more quickly with less paperwork. The proposed changes would simplify the process for estimating losses, would remove the need for collateral, and increase the loan limit from 80% to 100% of production losses.

"The proposed changes will allow more farmers to be eligible for emergency loans and help them maintain their operations while recovering from natural disasters," said Kelly. "The proposals are part of USDA's effort to streamline all farm loan program regulations..." The proposal were published in the Federal Register Sept. 12 with a 60-day comment period.

The proposals will reduce the number of written rejections that an applicant must acquire to demonstrate that other credit cannot be obtained; simplify the process for estimating production losses; remove the requirement that emergency loan applicants be able to provide collateral to secure an emergency loan; require applicants to obtain crop insurance on crops used as security; eliminate the current $5,000 family-living expense withholding at closing; increase the loan limit of 80% of production losses to 100% and allow livestock production losses to be considered physical losses rather than production losses.