Rural Credit Programs

Policy decisions also reflect a desire to develop and maintain a viable farm and rural economy, with minimal barriers to entry into agriculture and rural businesses. Credit programs have also been used in attempts to enhance the economic viability of rural communities and businesses. The overall policy objective was to promote and accelerate development of farm and rural communities and businesses. Efforts to accomplish more in the area of rural development may come through the establishment of the Rural Development Administration in US Department of Agriculture (USDA). In 1946, all of these purposes were consolidated into the Farmers Home Administration (FmHA), an agency of USDA, under the three categories of farm ownership loans, farm operating loans, and emergency loans. In addition, loan terms to FmHA borrowers tended to be more favorable: lower interest rates, longer terms, and smaller down payments. Other FmHA issues include guaranteed versus direct loans.