NASHVILLE, Tenn. (RFD-TV) — A new tax exemption for farmland real estate loans is beginning to reduce borrowing costs for farmers, even as lenders await formal guidance on how to apply the law. The Access to Credit for our Rural Economy Act (PDF Version) — also known as ACRE, which is included in the One Big Beautiful Bill Act (OBBBA) — took effect immediately on July 4 and gives banks a 25 percent tax exemption on interest earned from newly originated farmland loans.
While far smaller than the 100-percent exemption proposed initially, it still helps producers facing squeezed margins from high input costs and softer grain markets.
The law is expected to be especially helpful for farmers seeking to purchase land they currently rent or expand existing acreage. Bankers say even a quarter-point rate reduction can meaningfully improve cash flow for beginning farmers. But most institutions are moving cautiously while waiting for Treasury and IRS guidance clarifying technical gray areas, including how to handle the partial exemption, whether certain refinancings qualify, and how chattel or equipment loans might be treated when bundled into real estate deals.
Despite its limitations, the ACRE Act improves commercial banks’ competitiveness against the Farm Credit System, which receives a full interest-income exemption.
ABA estimates the law could save producers roughly $100 per acre annually over the next 30 years — far more than recent one-time emergency payments. Bankers also view the legislation as a significant policy foothold that builds momentum for future expansions, especially if Congress revisits broader tax legislation in the coming years.
Farm-Level Takeaway: The ACRE Act modestly reduces farmland borrowing costs now, with more savings possible once federal guidance clarifies which loans qualify.
Tony St. James, RFD-TV Markets Specialist
Richard Gupton of the Agricultural Retailers Association explains a new resource designed to help farmers comply with ESA-related pesticide label requirements.
November 21, 2025 01:56 PM
·
Sen. Roger Marshall discusses the Senate’s unanimous passage of the Whole Milk for Healthy Kids Act and what expanded milk options could mean for students and dairy farmers. Industry groups say it is a win for student nutrition and dairy producers.
November 21, 2025 01:19 PM
·
Crop producers face tightening credit and lower incomes, while strong cattle markets continue to stabilize finances in livestock-heavy regions.
November 21, 2025 11:58 AM
·
Supplemental Disaster Relief Program Stage Two will disburse around $16 billion, approved by Congress last year. Sign-ups begin Monday, and producers have until April to return applications.
November 21, 2025 11:48 AM
·
Removing the 40% duty sharply lowers U.S. beef import costs on beef, coffee, fertilizer and fruit, and restores Brazil’s competitiveness during a period of tight domestic supply.
November 21, 2025 10:30 AM
·
Row crop losses in 2025 are outpacing last year. With no disaster aid yet approved, many operations face a tough financial bridge to 2026 even as Farm Bill improvements remain a year away.
November 20, 2025 05:00 PM
·
Experts say farmers and ethanol producers would benefit from a risk-based ILUC system that protects forests without relying on speculative modeling.
November 20, 2025 04:24 PM
·
Farm CPA Paul Neiffer explains the USDA’s Stage Two Supplemental Disaster Relief Program, including application details, deadlines, and guidance for rural producers.
November 20, 2025 03:34 PM
·
November 20, 2025 02:04 PM
