§1948. Special assistance to certain qualified beginning farmers and ranchers
(a) In general
The Secretary shall provide special assistance in accordance with this section to enable a qualified beginning farmer or rancher who has not operated a farm or ranch, or who has operated a farm or ranch for not more than 5 years (referred to in this section as the "applicant"), to conduct viable farming or ranching operations.
(b) Submission of plan of farm operation
An applicant who desires to apply for special assistance under this section shall submit a plan, in coordination with activities conducted under sections 2006a, 2006b, 2006c, and 2006d of this title, that-
(1) describes, for each of the first 5 years for which assistance under this section is sought for the operation-
(A) how the operation is to be conducted;
(B) the types and quantities of commodities to be produced by the operation;
(C) the production methods and practices to be employed by the operation;
(D) the conservation measures to be taken in the operation;
(E) the equipment needed to conduct the operation (including any expected replacements for the equipment) and, with respect to each item of needed equipment, whether the applicant owns, leases, or otherwise has access to the item, or proposes to purchase, lease, or otherwise gain access to the item;
(F) the expected income and expenses of the operation;
(G) the expected credit needs of the operation, including the types and amounts of assistance to be sought under this section; and
(H) the site or sites at which the operation is (or is to be) located; and
(2) projects the financial status of the operation after assistance under this section has been provided for a period of not more than 10 years, consistent with section 1949 of this title, as is necessary for the operation to become financially viable without further assistance from the Secretary, including specific goals that the applicant projects to meet in order to progress toward graduation as expeditiously as possible.
(c) Determinations by county committee; approval of plan
The county committee shall approve a plan submitted by an applicant in accordance with subsection (b) of this section if the county committee determines that-
(1) the applicant has not operated a farm or ranch, or has operated a farm or ranch for not more than 5 years;
(2) during the 5-year period ending with the submission of the plan, the applicant has had sufficient education and experience to indicate that the applicant is able to conduct a successful farming or ranching operation, as the case may be;
(3) the applicant owns, leases, or has a commitment to have leased to the applicant the site or sites of the operation;
(4) there is, or will be, available to the applicant equipment sufficient to conduct the operation in accordance with the plan;
(5) the applicant agrees to participate in such loan assessment, borrower training, and financial management programs as the Secretary may require; and
(6) the applicant is otherwise eligible for assistance under this chapter.
(d) Determination by Secretary; approval of application for assistance
The Secretary shall approve an application for assistance under this section for an operation described in a plan approved by a county committee under this section if the Secretary determines that-
(1) the operation would generate income sufficient to cover the expenses of the operation, debt service, and adequate living expenses of the applicant, to the extent that other income would not cover the living expenses, if the operation received assistance under this section as provided for in the plan; and
(2) during the commitment period established in accordance with subsection (e)(1) of this section, the operation will be financially viable without further assistance from the Secretary and the identified goals are reasonable and practicable.
(e) Provision of assistance
(1) Determination of commitment period
(A) Initial determination
In approving an application under subsection (d) of this section, the Secretary shall, subject to subparagraph (C), determine the period during which assistance under this section is to be provided for the operation described in the application (referred to in this subsection as the "commitment period").
(B) Authority to extend period; no authority to reduce period
At any time, the Secretary may, subject to subparagraph (C) and subsections (f) and (g) of this section, extend the duration of the commitment period. The Secretary shall not reduce the duration of the commitment period.
(C) Limitations
(i) In general
The duration of any commitment period (including any extensions of the period) shall not exceed 10 years and shall be consistent with section 1949 of this title.
(ii) Eligibility for insured operating loans
During the commitment period, an applicant shall not be eligible to receive an insured operating loan under this section after the date that is 8 years after the date on which the applicant first receives assistance under this section.
(2) Operating loans; loan guarantees
(A)1 In general
To the extent that an applicant whose application is approved under subsection (d) of this section is unable to obtain sufficient credit from commercial or cooperative lenders to finance the operation described in the application at reasonable rates and terms (taking into consideration prevailing private and cooperative rates, and terms in the community in which the operation is (or is to be) located, for loans for similar purposes and periods of time), the Secretary shall, subject to the availability of funds and to subsections (f) and (g) of this section and consistent with sections 2006b and 2006d of this title, make a conditional commitment to the applicant for each of the years of the commitment period-
(i) to provide to any commercial or cooperative lender who makes a loan to the applicant that is within the credit needs of the operation (as specified in the plan contained in the application) a guarantee under section 1929(h) of this title for the repayment of 90 percent of the loan principal and interest;
(ii)(I) to provide to any commercial or cooperative lender who makes a loan to the applicant that is within the credit needs of the operation (as specified in the plan contained in the application) a guarantee under section 1929(h) of this title for the repayment of 90 percent of the loan principal and interest and an interest subsidy payment in the amount necessary to ensure that the applicant qualifies for such a loan but not more than the amount of interest assistance allowed by section 1999 of this title; or
(II) if during any of the first 4 years for which assistance is provided under this section the Secretary determines that the applicant will not qualify for a loan described in subclause (I), an interest subsidy payment sufficient to ensure that the effective rate of interest payable by the applicant on the loan equals the rate of interest charged to low income, limited resource borrowers on insured operating loans made under this subchapter that are of comparable size and maturity; or
(iii) to make an insured loan under this subchapter to the applicant, in the amount specified in the plan contained in the application, at an interest rate that is no higher than the interest rate charged to regular borrowers and no lower than the interest rate charged to low income, limited resource borrowers under this subchapter.
(3) Loans or guarantees for new or improved equipment
The Secretary shall make a commitment to any applicant whose application is approved under subsection (d) of this section to provide the applicant with loans under this subchapter or loan guarantees under section 1929(h) of this title to finance the acquisition, improvement, or repair of equipment needed in the operation described in the application if the plan contained in the application provides for the commitment, to the extent that the applicant is unable to obtain sufficient credit from commercial or cooperative lenders for such purposes at reasonable rates and terms (taking into consideration prevailing private and cooperative rates and terms in the community in which the operation is, or is to be, located, for loans for similar purposes and periods of time).
(4) Priority in purchase of inventory equipment; loans or guarantees for the purchases in certain cases
During the commitment period, the Secretary shall-
(A) accord the applicant whose application is approved under subsection (d) of this section priority for the purchase of equipment in the inventory of the Farmers Home Administration necessary for the success of the operation described in the application; and
(B) provide the applicant with loans under this subchapter or loan guarantees under section 1929(h) of this title to finance the purchases if the plan contained in the application provides for the assistance, to the extent that the applicant is unable to obtain sufficient credit from commercial or cooperative lenders for such purpose at reasonable rates and terms (taking into consideration prevailing private and cooperative rates, and terms in the community in which the operation is, or is to be, located, for loans for similar purposes and periods of time).
(5) Other kinds of assistance
During the commitment period, the Farmers Home Administration, the Extension Service, the Soil Conservation Service, and the other entities of the Department of Agriculture shall provide the applicant with such other assistance and information as may be needed in developing and implementing the operation described in the application.
(6) Fees
(A) Secretary
The Secretary shall not charge a fee to any person (including a lender) in connection with any loan guarantee provided in accordance with this section.
(B) Lender
A lender may charge a loan origination and servicing fee in connection with a loan or loan guarantee provided in accordance with this section in an amount not to exceed 1 percent of the amount of the loan.
(f) Annual plan revisions required as condition of continued assistance
The Secretary shall not provide assistance under this section for an operation for any particular year after the first year for which the assistance is provided, unless-
(1) not later than 60 days before the assistance is to be first provided for the particular year, the plan describing the operation has been revised, pursuant to section 2006b of this title, based on the experience of the year preceding the particular year, to provide the information required by subsection (b) of this section for the 5-year period beginning with the particular year (or, if shorter, the period beginning with the particular year and ending with the year in which the plan projects the operation as becoming financially viable); and
(2) the Secretary has approved the revised plan.
(g) Effects of avoidable failure to achieve goals
(1) Termination of commitments
The Secretary shall revoke commitment for assistance made to an applicant under this section if the operation of the applicant fails, for 2 consecutive years, to meet the goals specified in the plan, unless the failure has not materially reduced the likelihood of the operation becoming financially viable and is due to circumstances beyond the control of the applicant.
(2) Suspension of eligibility for assistance
During the 3-year period that begins with the date a commitment made to an applicant is revoked under paragraph (1), the applicant shall not be eligible for assistance under this section.
(Pub. L. 87 128, title III, §318, as added Pub. L. 102 554, §8, Oct. 28, 1992,
References in Text
For definition of "this chapter", referred to in subsec. (c)(6), see note set out under section 1921 of this title.
Section Referred to in Other Sections
This section is referred to in sections 1936, 1994 of this title.