Rising Interest Rates and Ag Lending

Wisconsin bankers have their voice heard in Washington DC thanks to the American Bankers Association (ABA). They represent 83 percent of all banks nationwide and have agricultural loans in their portfolio. Ed Elfmann, Senior Vice President of Agricultural and Rural Banking Policy for ABA says recent conversations in the lending space have been focused around commodity prices.

Addressing these concerns is the ACRE Act (Access to Credit for our Rural Economy). The act is currently gathering bipartisan support with 46 co-sponsors in the House. This legislation aims to alleviate the burden of interest rates by eliminating taxation on farm real estate, rural housing, and also aquaculture.

The evolving conversation around lending priorities has also been shaped by ongoing shifts in the agricultural landscape. With the rise in agricultural costs and an aging farming population, the focus has pivoted towards supporting customers through this transition.

“Increasing ag costs and the aging farming population are changing the dynamics. We’re accelerating into the next generation faster than anticipated,” says Elfmann.

Amidst these discussions, Washington, D.C., remains a focal point, with talks revolving around critical aspects such as net farm income, farm sizes, and the impending Farm Bill. The potential implications of economic shifts on loan evaluations and the need for potential adjustments in the Farm Bill to align with the changing agricultural scenario are key points of consideration.

“The Farm Bill, specifically its credit title, remains a priority,” explains Elfmann. “We’re advocating for increased FSA loan programs and initiatives to support beginning farmers.”

Key among the priorities are measures to ease the barriers for beginning farmers. Other priorities include increasing loan limits as well as enhancing rural development programs to revitalize rural communities.