372 
‘‘(7) In this subsection, the term ‘socially dis-
advantaged farmer or rancher’ has the meaning given 
in section 355(e)(2).’’. 
SEC. 5022. LOAN FUND SET-ASIDES. 
Section 346(b)(2) of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1994(b)(2)) is amended— 
(1) in subparagraph (A)— 
(A) in clause (i)— 
(i) in subclause (I), by striking ‘‘70 
percent’’ and inserting ‘‘not less than 75 
percent of the total amount made available 
under paragraph (1)’’; and 
(ii) in subclause (II)— 
(I) in the subclause heading, by 
inserting ‘‘; 
PARTICIPATION
LOANS’’ 
after ‘‘PAYMENT LOANS’’; 
(II) by striking ‘‘60 percent’’ and 
inserting ‘‘not less than 2⁄3 of the 
amount reserved under subclause (I)’’; 
and 
(III) by inserting ‘‘and participa-
tion loans’’ after ‘‘section 310E’’; and 
(B) in clause (ii)(III), by striking ‘‘2003 
through 2007, 35 percent’’ and inserting ‘‘2008 
through 2012, not less than 50 percent of the 
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373 
total amount made available under paragraph 
(1)’’; and 
(2) in subparagraph (B)(i), by striking ‘‘25 per-
cent’’ and inserting ‘‘not less than 40 percent of the 
total amount made available under paragraph (1)’’. 
SEC. 5023. TRANSITION TO PRIVATE COMMERCIAL OR 
OTHER SOURCES OF CREDIT. 
Subtitle D of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1981–2008r) is amended by inserting 
after section 344 the following: 
‘‘SEC. 345. TRANSITION TO PRIVATE COMMERCIAL OR 
OTHER SOURCES OF CREDIT. 
‘‘(a) IN GENERAL.—In making or insuring a farm 
loan under subtitle A or B, the Secretary shall establish 
a plan and promulgate regulations (including performance 
criteria) that promote the goal of transitioning borrowers 
to private commercial credit and other sources of credit in 
the shortest practicable period of time. 
‘‘(b) COORDINATION.—In carrying out this section, the 
Secretary shall integrate and coordinate the transition pol-
icy described in subsection (a) with— 
‘‘(1) the borrower training program established 
by section 359; 
‘‘(2) the loan assessment process established by 
section 360; 
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374 
‘‘(3) the supervised credit requirement established 
by section 361; 
‘‘(4) the market placement program established 
by section 362; and 
‘‘(5) other appropriate programs and authorities, 
as determined by the Secretary.’’. 
SEC. 5024. EXTENSION OF THE RIGHT OF FIRST REFUSAL 
TO REACQUIRE HOMESTEAD PROPERTY TO 
IMMEDIATE 
FAMILY 
MEMBERS 
OF 
BOR-
ROWER-OWNER. 
Section 352(c)(4)(B) of the Consolidated Farm and 
Rural Development Act (7 U.S.C. 2000(c)(4)(B)) is amend-
ed— 
(1) in the 1st sentence, by striking ‘‘, the bor-
rower-owner’’ inserting ‘‘of a borrower-owner who is 
a socially disadvantaged farmer or rancher (as de-
fined in section 355(e)(2)), the borrower-owner or a 
member of the immediate family of the borrower- 
owner’’; and 
(2) in the 2nd sentence, by inserting ‘‘or imme-
diate family member, as the case may be,’’ before 
‘‘from’’. 
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375 
SEC. 5025. RURAL DEVELOPMENT AND FARM LOAN PRO-
GRAM ACTIVITIES. 
Subtitle D of the Consolidated Farm and Rural Devel-
opment Act (7 U.S.C. 1981–2008r) is amended by inserting 
after section 364 the following: 
‘‘SEC. 365. RURAL DEVELOPMENT AND FARM LOAN PRO-
GRAM ACTIVITIES. 
‘‘The Secretary may not complete a study of, or enter 
into a contract with a private party to carry out, without 
specific authorization in a subsequent Act of Congress, a 
competitive sourcing activity of the Secretary, including 
support personnel of the Department of Agriculture, relat-
ing to rural development or farm loan programs.’’. 
Subtitle D—Farm Credit 
SEC. 5031. AGRIBUSINESS LOAN ELIGIBILITY. 
(a) LONG TERM LOANS.— 
(1) ELIGIBLE BORROWERS.—Section 1.9 of the 
Farm Credit Act of 1971 (12 U.S.C. 2017) is amend-
ed— 
(A) by striking ‘‘or’’ at the end of para-
graph (2); 
(B) by striking the period at the end of 
paragraph (3) and inserting ‘‘; or’’; and 
(C) by adding at the end the following: 
‘‘(4) persons primarily engaged in processing, 
preparing for market, handling, purchasing, testing, 
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376 
grading, distributing, or marketing farm or aquatic 
products; or primarily engaged in furnishing farm or 
aquatic business services, or farm or aquatic supplies, 
including inputs such as feed or fertilizer, equipment, 
and other capital goods to farmers, ranchers, or pro-
ducers or harvesters of aquatic products, but only to 
the extent that the activities are related to renewable 
energy, except that a direct loan may not be made 
available under this title to a person eligible to bor-
row from a bank for cooperatives under section 3.7 or 
3.8 (without regard to subsection (b)(1)(E) or 
(b)(1)(F) thereof).’’. 
(2) LOAN PURPOSES.—Section 1.11 of such Act 
(12 U.S.C. 2019) is amended— 
(A) in subsection (a)(1), by striking ‘‘farm-
ers, ranchers, and producers or harvesters of 
aquatic products’’ and inserting ‘‘persons eligible 
under section 1.9(1)’’; 
(B) in subsection (a)(2), by inserting 
‘‘under paragraph (1)’’ after ‘‘Farm Credit 
Bank’’; 
(C) in subsection (b)(1), by striking ‘‘rural 
residents’’ and inserting ‘‘persons eligible under 
section 1.9(3)’’; 
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