WASHINGTON, June 19, 2016 – Agriculture Secretary Tom Vilsack has notified Congress that he plans to increase to $2.5 billion from $2 billion the amount of loans the Farm Service Agency can guarantee from FSA-approved commercial lenders to cover a shortfall during the fiscal year ending Sept. 30.

Low commodity prices and a dramatic decline in farm income over the past two years have caused banks to become more cautious in their lending practices, hence there is a greater demand for USDA guaranteed loans. The department’s Farm Service Agency has just about run out of the $2 billion Congress approved for the guaranteed loan program, three months before the end of the fiscal year. FSA is also looking at a projected shortfall in federally assisted farm operating loans.