7 U.S.C. § 1941
The Secretary may make and insure loans under this subchapter to farmers and ranchers in the United States, and to farm cooperatives and private domestic corporations, partnerships, joint operations, trusts, limited liability companies, and such other legal entities as the Secretary considers appropriate, that are controlled by farmers and ranchers and engaged primarily and directly in farming or ranching in the United States, subject to the conditions specified in this section. To be eligible for such loans, applicants who are individuals, or, in the case of cooperatives, corporations, partnerships, joint operations, trusts, limited liability companies, and such other legal entities, individuals holding a majority interest in such entity, must (A) be citizens of the United States, (B) for direct loans only, have either training or farming experience that the Secretary determines is sufficient to assure reasonable prospects of success in the proposed farming operations, taking into consideration all farming experience of the applicant, without regard to any lapse between farming experiences, (C) be or will become operators of not larger than family farms (or in the case of cooperatives, corporations, partnerships, joint operations, trusts, limited liability companies, and such other legal entities in which a majority interest is held by individuals who are related by blood or marriage, as defined by the Secretary, such individuals must be or will become either owners or operators of not larger than a family farm and at least one such individual must be or will become an operator of not larger than a family farm or, in the case of holders of the entire interest who are related by blood or marriage and all of whom are or will become farm operators, the ownership interest of each such holder separately constitutes not larger than a family farm, even if their interests collectively constitute larger than a family farm, as defined by the Secretary), and (D) be unable to obtain sufficient credit elsewhere to finance their actual needs at reasonable rates and terms, taking into consideration prevailing private and cooperative rates and terms in the community in or near which the applicant resides for loans for similar purposes and periods of time. In addition to the foregoing requirements of this subsection, in the case of corporations, partnerships, joint operations, trusts, limited liability companies, and such other legal entities, the family farm requirement of subparagraph (C) of the preceding sentence shall apply as well to the farm or farms in which the entity has an operator interest and the requirement of subparagraph (D) of the preceding sentence shall apply as well to the entity in the case of cooperatives, corporations, partnerships, joint operations, trusts, limited liability companies, and such other legal entities.
An entity that is an operator described in paragraph (1) that is owned, in whole or in part, by other entities, shall be considered to meet the direct ownership requirement imposed under paragraph (1) if at least 75 percent of the ownership interests of each embedded entity of the entity is owned directly or indirectly by the individuals that own the family farm.
Subject to paragraphs (3) and (4), the Secretary may make a direct loan under this subchapter only to a farmer or rancher who-
In this subsection, the term "direct operating loan" does not include-
If, as of April 4, 1996, a farmer or rancher has received a direct operating loan under this subchapter during each of 4 or more previous years, the borrower shall be eligible to receive a direct operating loan under this subchapter during 3 additional years after April 4, 1996.
The Secretary shall waive the limitation under paragraph (1)(C) or (3) for a direct loan made under this subchapter to a farmer or rancher whose farm or ranch land is subject to the jurisdiction of an Indian tribe and whose loan is secured by 1 or more security instruments that are subject to the jurisdiction of an Indian tribe if the Secretary determines that commercial credit is not generally available for such farm or ranch operations.
On a case-by-case determination not subject to administrative appeal, the Secretary may grant a borrower a waiver, 1 time only for a period of 2 years, of the limitation under paragraph (1)(C) or (3) for a direct operating loan if the borrower demonstrates to the satisfaction of the Secretary that-
The Secretary shall prepare a report annually that describes-
The report shall provide a demographic breakdown, on a State-by-State basis, of-
The available demographic information shall include, to the maximum extent practicable, a description of race or ethnicity, gender, age, type of farm or ranch, financial classification, number of years of indebtedness, veteran status, and other similar information, as determined by the Secretary.
In addition to information described in subparagraph (B), the report shall provide-
The Secretary shall-
1See References in Text note below.
7 U.S.C. § 1941
EDITORIAL NOTES
REFERENCES IN TEXTThis chapter, referred to in subsec. (b)(4), was in the original "this title", meaning title III of Pub. L. 87-128, Aug. 8, 1961, 75 Stat. 307, known as the Consolidated Farm and Rural Development Act, which is classified principally to this chapter. For complete classification of title III to the Code, see Short Title note set out under section 1921 of this title and Tables. Section 2279(e) of this title, referred to in subsec. (c)(2)(B), was redesignated section 2279(a) of this title by section 12301(b)(3) of Pub. L. 115-334.
CODIFICATION Pub. L. 110-234 and Pub. L. 110-246 made identical amendments to this section. The amendments by Pub. L. 110-234 were repealed by section 4(a) of Pub. L. 110-246.
AMENDMENTS2014-Subsec. (a)(1). Pub. L. 113-79, §5101(1)-(5), designated existing provisions as par. (1) and inserted heading, in first sentence, substituted "limited liability companies, and such other legal entities as the Secretary considers appropriate," for "and limited liability companies", in second sentence, redesignated pars. (1) to (4) as subpars. (A) to (D), respectively, and substituted "limited liability companies, and such other legal entities" for "and limited liability companies" in two places, and, in third sentence, substituted "limited liability companies, and such other legal entities" for "and limited liability companies" in two places, "subparagraph (C)" for "clause (3)" and "subparagraph (D)" for "clause (4)".Subsec. (a)(2). Pub. L. 113-79, §5101(6), added par. (2).Subsec. (b)(1). Pub. L. 113-79, §5102, struck out "who are rural residents" after "youths".Subsec. (b)(5). Pub. L. 113-79, §5103, added par. (5).Subsec. (c)(2). Pub. L. 113-79, §5106(b)(1), added par. (2) and struck out former par. (2). Prior to amendment, text read as follows: "In this subsection, the term 'direct operating loan' shall not include a loan made to a youth under subsection (b) of this section." Subsec. (c)(5). Pub. L. 113-79, §5104, added par. (5). 2008- Pub. L. 110-246, §5101, inserted section catchline and, in subsec. (a), inserted heading, substituted "The Secretary may" for "The Secretary is authorized to" in introductory provisions, and inserted ",taking into consideration all farming experience of the applicant, without regard to any lapse between farming experiences" after "farming operations" in cl. (2).2002-Subsec. (a). Pub. L. 107-171, §5302(a), substituted "joint operations, trusts, and limited liability companies" for "and joint operations" wherever appearing. Subsec. (c)(1). Pub. L. 107-171, §5101(1)(A), substituted "paragraphs (3) and (4)" for "paragraph (3)" in introductory provisions. Subsec. (c)(1)(A). Pub. L. 107-171, §5101(1)(B), struck out "who has not operated a farm or ranch, or who has operated a farm or ranch for not more than 5 years" before semicolon. Subsec. (c)(4). Pub. L. 107-171, §5101(2), added par. (4).1998-Subsec. (a). Pub. L. 105-277 inserted "for direct loans only," before "have either" in cl. (2). 1996-Subsec. (b)(1). Pub. L. 104-127, §661(f), struck out "and for the purposes specified in section 1942 of this title" before period at end.Subsec. (b)(4). Pub. L. 104-127, §611(b), added par. (4).Subsec. (c). Pub. L. 104-127, §611(a), added subsec. (c) and struck out former subsec. (c) which read as follows: "The Secretary may not restrict eligibility for loans made or insured under this subchapter for purposes set forth in section 1942 of this title solely to borrowers of loans that are outstanding on December 23, 1985."1985-Subsec. (a). Pub. L. 99-198, §1301(a), substituted-(1) ",partnerships, and joint operations" for "and partnerships" wherever appearing after "corporations";(2) ",partnerships, and joint operations" for ",and partnerships" wherever appearing after "corporations"; and (3) "individuals" for "members, stockholders, or partners, as applicable," wherever appearing. Pub. L. 99-198, §1303, in cl. (3) parenthetical, inserted provision treating blood or marriage related owner-operators of the entire farm interest as separate interest holders of not larger than family farms though collective ownership constitutes a larger than a family farm. Subsec. (c). Pub. L. 99-198, §1302(b), added subsec. (c).1981-Subsec. (a). Pub. L. 97-98 substituted "corporations and partnerships, the family farm" for "cooperatives, corporations, and partnerships, the family farm" and "as well to the entity in the case of cooperatives, corporations, and partnerships" for "as well to the entity".1978- Pub. L. 95-334 substituted provisions setting forth eligibility criteria for loans to farmers and ranchers in the United States, and to farm cooperatives and private domestic corporations and partnerships controlled by farmers and ranchers and engaged primarily and directly in farming or ranching in the United States, for provisions setting forth eligibility criteria for loans to farmers and ranchers in the United States, Puerto Rico, and the Virgin Islands. 1972- Pub. L. 92-419 designated existing provisions as subsec. (a) and added subsec. (b).
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 2008 AMENDMENT Amendment of this section and repeal of Pub. L. 110-234 by Pub. L. 110-246 effective May 22, 2008, the date of enactment of Pub. L. 110-234 see section 4 of Pub. L. 110-246 set out as an Effective Date note under section 8701 of this title.
EFFECTIVE DATE OF 1996 AMENDMENT Amendment by section 611 of Pub. L. 104-127 effective 90 days after Apr. 4, 1996, and amendment by section 661(f) of Pub. L. 104-127 effective Apr. 4, 1996, see section 663(a), (b) of Pub. L. 104-127 set out as a note under section 1922 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97-98 effective Dec. 22, 1981, see section 1801 of Pub. L. 97-98 set out as an Effective Date note under section 4301 of this title.
FARM OPERATING LOAN ELIGIBILITY Pub. L. 106-224, title II, §255, June 20, 2000, 114 Stat. 424, provided that: "During the period beginning on the date of the enactment of this Act [June 20, 2000] and ending on December 31, 2002-"(1) sections 311(c) and 319 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1941(c), 1949) shall have no force or effect; and"(2) in making direct loans under subtitle B of that Act (7 U.S.C. 1941 et seq.), the Secretary shall give priority to 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."
AUTHORITY OF SECRETARY TO MAKE OR GUARANTEE CERTAIN LOANS Pub. L. 104-134, title II, §20022002,, 110 Stat. 1321-313, provided that: "Notwithstanding any other provision of law, the Secretary of Agriculture is hereby authorized to make or guarantee an operating loan under Subtitle B [7 U.S.C. 1941 et seq.] or an emergency loan under Subtitle C [7 U.S.C. 1961 et seq.] of the Consolidated Farm and Rural Development Act (7 U.S.C. 1922 et. seq.), as in effect prior to April 4, 1996, to a loan applicant who was less than 90 days delinquent on April 4, 1996, if the loan applicant had submitted an application for the loan prior to April 5, 1996."
1989 FARM OPERATING LOANS Pub. L. 101-82, title III, §302, Aug. 14, 1989, 103 Stat. 582, required the Secretary of Agriculture to ensure that direct operating loans made or insured under this subchapter for 1990 crop production were to be made available to farmers and ranchers suffering major losses due to excess moisture, freeze, storm, or related condition occurring in 1989 or drought or related condition occurring in 1988 or 1989.Similar provisions were contained in the following prior act: Pub. L. 100-387, title III, §312, Aug. 11, 1988, 102 Stat. 948.
- beginning farmer or rancher
- The term "beginning farmer or rancher" means such term as defined by the Secretary.
- borrower
- The term "borrower" means any farm borrower who has outstanding obligations to the Secretary under any farmer program loan, without regard to whether the loan has been accelerated, but does not include any farm borrower all of whose loans and accounts have been foreclosed on or liquidated, voluntarily or otherwise.
- direct loan
- The term "direct loan" means a loan made or insured from funds in the account created by section 1929 of this title.
- farmer
- The term "farmer" includes a person who is engaged in, or who, with assistance afforded under this chapter, intends to engage in, fish farming.