borrowed funds. ° Therefore, there is serious doubt 

 that the Beginning Farm Loan Program can continue in 

 existence. 



Discussion ,.. 



The Beginning Farm Loan Program is unlikely to 

 succeed as it is presently funded. It is believed that 

 between $3 and $4 million in loans must be granted each 

 year if the program is to be self-supporting, but 



present factors will inhibit development of the 



29 

 program.''^ 



Federal legislation was finally enacted, as part of 

 the Tax Reform Act of 1986, which will eliminate the tax 

 exemption for beginning farm loans after December 31, 



on 



1989.-^" This legislation and the current adverse 

 conditions of agriculture may render the existing 

 Beginning Farm Loan Program virtually unusable. 



However, according to the Montana Department of 

 Agriculture, there may be a continued, real need for the 

 Beginning Farm Loan Program. The Department has 

 indicated that it has received over 1,500 inquiries 

 regarding the program during the past two years. ^ In 

 addition, the Department has indicated that nearly half 

 of all agricultural producers may have need to transfer 

 ownership of their land in the next 10 to 15 years, and 

 the availability of capital to facilitate this transfer 

 to a new generation of farmers is in doubt. ^^ 



35 



