Agriculture Loans Glossary

Beginning Farmer or Rancher
An individual or entity who has not operated a farm or ranch, or who has operated a farm or ranch for not more than 10 years (last updated 03/19/2004)

Entities
Cooperatives, corporations, partnerships, joint operations, trusts, or limited liability companies. (last updated 03/19/2004)

Family Farm
A farm which

A. produces agricultural commodities for sale in sufficient quantities so that it is recognized in the community as a farm rather than a rural residence;
B. provides enough agricultural income by itself, including rented land, or together with any other dependable income, to enable the borrower to pay necessary family living and operating expenses, maintain essential chattel and real property, and pay debts.
C. is managed by: the borrower when a loan is made to an individual; the members, stockholders, partners, or joint operators responsible for operating the farm when a loan is made to a cooperative, corporation, partnership, or joint operation
D. has a substantial amount of the labor requirements for the farm and non-farm enterprise provided by: the borrower's immediate family; the members, stockholders, partners, or joint operators responsible for operating the farm when a loan is made to a cooperative, corporation, partnership, or joint operation
E. uses or may use a reasonable amount of full-time hired labor and seasonal labor during peak loan periods. (last updated 03/19/2004)

Family living expenses
Any withdrawals from income to provide for needs of family members. (last updated 03/19/2004)

Farm
A tract or tracts of land, improvements, and other appurtenances considered to be farm property which is used or will be used in the production of crops, livestock, and aquaculture products for sale in sufficient quantities to that the property is recognized as a farm rather than a rural residence. (last updated 03/19/2004)

Farm Service Agency (FSA)
The Farm Service Agency (FSA) is an agency of the U.S. Department of Agriculture. (last updated 03/19/2004)

Graduation
FSA's determination that a borrower of a direct loan is financially stable enough to refinance that loan with a commercial lender with or without a guarantee. (last updated 03/19/2004)

Interest Assistance
A program under FSA's guaranteed farm operating loan program which enables lenders to provide credit to operators of family farms who do not have the financial resources to meet the standard repayment terms. Under this program, FSA enters into an agreement with the lender to reimburse the lender 4 percentage points on the loan, in exchange for the lender reducing the interest rate charged to the borrower. (last updated 03/19/2004)

Non-farm Enterprise
Include, but are not limited to, raising earthworms, exotic birds, tropical fish, dogs, or horses for non-farm purposes (including racing, pleasure riding, or show. Farm purposes would include draft or cutting horses). FSA loan funds cannot be used to finance a non-farm enterprise. (last updated 03/19/2004)

Socially Disadvantaged Applicant
A loan applicant who is a member of a group whose members have been subjected to racial, ethnic or gender prejudice because of their identity as a member of a group, without regard to their individual qualities. These groups include women, blacks, American Indians, Alaskan Natives, Hispanics, Asians, and Pacific Islanders. (last updated 03/19/2004)