A new bill introduced in the U.S. Senate would provide loan financing to farmers and ranchers to purchase precision agriculture equipment.
Sen. Deb Fischer, R-Neb., and Sen. Amy Klobuchar, D-Minn., announced the Precision Agriculture Loan Act on Sept. 15. It’s the first federal loan program dedicated entirely to precision agriculture.
The act would create a program within the U.S. Department of Agriculture to provide loans at interest rates lower than 2% with loan terms from 3 to 12 years in length. Under the proposal, farmers could take multiple loans up to an aggregate limit of $500,000 to use on any precision technology that improves efficiency or reduces inputs.
In her Senate floor speech on Sept. 20, Fischer said precision equipment has the ability to transform how producers manage farms, especially those running small family farms who may not be able to afford precision equipment currently.
“My bill would help the math start to make sense for our producers who would like to adopt these technologies, but they haven’t been able to afford them,” Fischer says.
The Association of Equipment Manufacturers released a statement supporting the act, saying it gives farmers a new set of tools to help achieve climate goals while continuing to feed and fuel the world.
Scott Hoober — one of the owners of the 10-store dealership Hoober Inc. in Pennsylvania, Delaware, Maryland and Virginia — also sees the act as good for dealerships’ business.
“Most dealerships today have a significant precision ag department or individuals who are involved with precision ag, so that can add additional customers to our customer base, and the customers that are there, help them to invest even more,” Hoober says. “In either case, it could help to generate revenue in the dealerships.”
Under the proposal, farmers would be able to take loans to purchase new precision equipment or retrofit older equipment with new technology. Hoober predicts dealerships would see customers requesting a combination of both with the financing.
“Typically what we see is for those that aren't as heavily involved (with precision agriculture), we’re usually retrofitting to get them started,” Hoober says. “Once they start seeing the benefits on stuff that they've retrofitted, then they'll trade up and go to a complete system that's already installed on a unit or a new unit completely. At the same time, it depends on the individual’s desires and in their ability to purchase new equipment.”
The bill has been referred to the Senate Committee on Agriculture, Nutrition, and Forestry. It must pass the Senate and House before heading to the president’s desk to be signed into law. As of Sept. 28, no future action has been scheduled.