ACRE Act introduced to support American producers
U.S. Sens. Dr. Roger Marshall and Jerry Moran (both R-KS) introduced the Access to Credit for our Rural Economy (ACRE) Act of 2025 on March 7.
This new legislation will enable community banks to manage agricultural real estate loans by providing them with tax-exempt status on earned interest.
The ACRE Act is not a new government program, but a tool for agricultural lenders which pairs well with other U.S. Department of Agriculture (USDA) programs already being used by beginning and disadvantaged farmers and ranchers.
The ACRE Act benefits American families, farmers and rural communities across the country by making loans more accessible and affordable for rural and agricultural borrowers.
Showing support
Those in support of the act include Sens. Angus King (I-ME), Ruben Gallego (D-AZ), Kevin Cramer (R-ND) and Tommy Tuberville (R-AL), who emphasize the importance of reducing high interest rates to support rural housing and agriculture.
The House companion bill was introduced by Reps. Randy Feenstra (R-IA), Don Davis (D-NC) and Nathaniel Moran (R-TX), which would help sustain and grow rural America by making it easier for farmers, ranchers and rural communities to access low-cost credit.
According to a statement released by Marshall, the ACRE Act will assist community banks in tackling one of the biggest challenges for rural communities – high interest rates.
He states, “High rates raise the cost of doing business for family farms, makes it harder for small businesses to grow and leaves home ownership unattainable for many. The ACRE Act is commonsense legislation to reverse these trends.”
The ACRE Act is also supported by banking and agricultural organizations like the American Bankers Association (ABA) and Independent Community Bankers of America (ICBA), who praise its potential to lower borrowing costs and sustain rural economies.
ICBA President and Chief Executive Officer Rebeca Romero Rainey adds, “This important legislation will help community bank lenders revive and sustain rural economies struggling to overcome the impact of higher interest rates.”
How will it help?
The ACRE Act could lower the cost to purchase land and farmers and ranchers would have increased access to commercial credit while reducing the need for USDA programs.
In addition, the act will allow all federally-insured and regulated financial institutions to leverage a tax policy that government-sponsored enterprises are already using to support rural and agricultural lending.
By freeing up more capital, it will help farmers and ranchers directly, ensuring rural communities can prosper with the help of sound and productive credit provided by local community farm banks.
According to the ABA, the ACRE Act removes taxation on interest income earned by the Federal Deposit Insurance Company, which insures institutions on new farm real estate loans and home mortgage loans throughout the country’s 17,000 rural areas and towns.
This will enable community banks to lower interest rates and expand access to low-cost sources of credit.
The ACRE Act is estimated to save rural communities up to $1.18 billion in annual interest payments and offers a simple solution to help farmers, ranchers and rural homeowners without new government payments or programs.
The ongoing impacts of high inflation and supply chain disruptions are increasing the cost of running farms and ranches across America. Simultaneously, elevated interest rates are affecting farmers’ profitability.
By reducing costs for rural borrowers, the ACRE Act aims to support agricultural producers and rural communities during this challenging period.
Data points
As inflation and supply chain disruptions are driving up the cost of running America’s farms and ranches, it forces farmers to rely more heavily on credit. Nearly $360 billion in real estate debt in 2024 – a 4.5 percent increase from 2023 – was held by farmers.
The interest expense for real estate debt in 2024 totaled more than $19 billion, the USDA reports.
The ABA announces improving competition in a real estate market would lead to a reduction in the cost of credit for farmers.
“If passed, the ACRE Act will deliver approximately $1.18 billion worth of annual interest expense savings to farmers and ranchers in 2024, approximately $1 billion for loans secured by farmland and $180 million for rural mortgages,” ABA estimates. “This savings would equal 119 percent of farmers’ annual personal property taxes in 2024.”
According to ABA, the ACRE Act would have a significant local impact in Wyoming.
Specifically, 11,938 farms would qualify for interest savings on loans secured by real estate.
The total annual savings from farm real estate loans would amount to $6,298,452, while the savings from rural mortgages would total $619,798. In total, the estimated annual savings would be $6,918,250.
Melissa Anderson is the editor of the Wyoming Livestock Roundup. Send comments on this article to roundup@wylr.net.
