Sec. 5509. Report on improving creditworthiness of direct and guaranteed loan borrowers
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Not later than 1 year after the date of enactment of this Act, the Secretary shall submit to the Committee on Agriculture of the House of Representatives and the Committee on Agriculture, Nutrition, and Forestry of the Senate a report evaluating the feasibility of requiring the adoption of certain risk management practices as a condition for approving certain direct and guaranteed farm loans. In the report under subsection (a), the Secretary shall evaluate the feasibility of requiring, as a condition for approving certain direct and guaranteed farm loans, the adoption of 1 or more of the following risk management practices:
Hedging and marketing price or revenue risk management strategies. Insurance coverage optimization or coordination. Periodic financial reporting or financial management practices. Cash management services to facilitate timely disbursement of funds and structured collection of operating revenues. The use of integrated monitoring and analytics tools to align risk management and financial decisions with observed environmental and production conditions. Other risk mitigation practices as determined by the Secretary.
Voluntary lender incentives to promote integrated risk management support without increasing costs or burdens for applicants. In completing the report under subsection (a), the Secretary shall also evaluate the feasibility of establishing a certification program that identifies loans approved contingent on the adoption of enhanced risk management practices, including through voluntary lender incentives to promote integrated risk management support without increasing costs or burdens for applicants.
The requirements and evaluations under this section shall apply only to operating, production, and working capital loans made for agricultural production purposes and shall not apply to real estate loans, rural development loans, housing loans, business and industry loans, or other non-operating credit programs administered by the Secretary.