CAFO limbo over loan approval

slowdown

10/20/16 10:00 AM EDT

With help from Catherine Boudreau, Ian Kullgren, Jenny Hopkinson and Adam Behsudi

CAFO LIMBO OVER LOAN APPROVAL SLOWDOWN: The Obama administration is slow-walking the approval process for the credit it gives to large dairy and livestock farms out of fear it could get slapped with another big environmental lawsuit, reports Pro Ag’s Catherine Boudreau this morning. Big farms in the South, Midwest and Northeast are struggling to get the financing they need because of the slowdown, with applications for loan guarantees languishing for more than a year and a half in some cases, lenders and state farm groups say.

The foot-dragging stems from a 2013 lawsuit that the environmental law nonprofit Earthjustice filed against the administration over loans it guaranteed for farmers to build a concentrated animal feeding operation in northern Arkansas. The litigation has forced the Small Business Administration to reevaluate the way it vets the loan applications to include an assessment of the environmental impact of construction, causing major delays in loan approvals. The Department of Agriculture’s Farm Service Agency is also taking longer to sign off on guaranteed farm loans for new construction, due to stricter environmental scrutiny, lenders say — though an agency spokesman said its environmental evaluation process hasn’t changed as a result of the lawsuit, with the exception of the Arkansas case.

The backlog of loan applications in states like Arkansas, New York and Wisconsin is hurting the already-sluggish rural economy, lawmakers say, and comes as the agriculture industry faces increasing pressure from environmental groups to reduce the impact of farming on land, water and climate. Read Boudreau’s report here.