A senior member of the tax-writing Senate Finance Committee, Grassley pushed for pilot projects in 1981 to establish the low-interest lending program for beginning farmers. The loan program uses federal tax-exempt "aggie" bonds to finance low-interest loans made available through private lenders participating in the program.
"Aggie Bonds are important tools for first-time farmers," said Grassley. "They are a proven, cost effective way to support and encourage individuals to start their own farming operations. We need to enhance our efforts to encourage people to farm. In the next few years, Iowa will see about one-quarter of our farmers retiring."
Financed through the Iowa Agriculture Development Authority, a division of the Iowa Department of Agriculture and Land Stewardship, the loans offer beginning farmers access to low-interest loans to start their operation. The program was reauthorized several times and introduced in other states during the 1980s. In 1993, Grassley won congressional approval to make the aggie bond program permanent.
"As more farmers approach retirement and the average age of the family farmer in Iowa continues to climb, we need to encourage and help members of the next generation stay on the farm and build their livelihoods in agriculture. Helping to maintain independent family farmers will have a positive social and economic ripple effect in our small towns and rural areas."
Grassley successfully led efforts in 1996 to expand the lending program to allow first- time farmers to qualify for aggie bonds to purchase family farms from their parents or other relatives. He also expanded eligibility by doubling the size of farmland that a person could already own and still qualify for the lending program.
This year, Grassley supported two pieces of legislation that would remove aggie bonds from under the private activity bond cap and another that would raise the cap for private activity bonds. Provisions to raise the cap were included in the omnibus spending package approved by Congress in October. From 1999 to 2002, the limit is set at $50 per capita or $150 million; $55 per capita or $165 million in 2003; $60 per capita or $195 million in 2005; $70 per capita or $210 million in 2006; and $75 per capita or $225 million in 2007 and thereafter.
In a ceremony today in Ottumwa, the Iowa Agricultural Development Authority will close the 2,499 and 2,500 beginning farmer loans. The beginning farmers who qualified for the loans are Tony and Angela Bond of Hedrick and Gary and Sharla Gardner of Albia, respectively. Grassley's regional director, Penny Vacek, attended the ceremony on his behalf.
In partnership with his son, Robin, Grassley is the only working family farmer in the U.S. Senate. The farm state lawmaker brings a strong voice to the policy tables in Washington and fights for issues affecting rural America and American agriculture. "I extend my best wishes to these two beginning farm families and am very glad they are able to benefit from the aggie bond program," said Grassley.