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
Recognizing phosphorus and potash as critical minerals underscores their importance in crop production and food security, providing producers with an added layer of risk protection.
November 06, 2025 03:40 PM
·
For tight margins, contract grazing leverages existing acres into new income streams and spreads risk. Here are some tips for row crop farmers looking to diversify.
November 06, 2025 02:45 PM
·
Farm CPA Paul Neiffer shares insight into what these new accounts, established in provisions of the Big, Beautiful Bill, could mean for the farm families.
November 06, 2025 02:34 PM
·
AFBF Economist Danny Munch shares how passing the Whole Milk for Healthy Kids Act could give the dairy industry a needed boost.
November 06, 2025 02:31 PM
·
It started as a simple service project for 4-H — collect some shoes, help a few people. But for Franklin Parish High School senior Eli Rogers, it has turned into something much bigger.
November 06, 2025 12:15 PM
·
The Court may limit emergency tariff powers, complicating a key bargaining tool; ag could see shifts in input costs and export dynamics as China, Brazil, and India talks evolve.
November 06, 2025 10:04 AM
·
RFD-TV expert Roger McEowen explains why a “skinny” Farm Bill is likely in the future, but its scope may change due to provisions contained in the Big, Beautiful Bill.
November 05, 2025 03:19 PM
·
David Klein with the American Society of Farm Managers and Rural Appraisers (ASFMRA) shares an end-of-harvest update and a peek at the farmland market in Central Illinois.
November 05, 2025 12:58 PM
·
Host of
RealAg Radio Shaun Haney discusses how the proposed reductions to agriculture programs in Canada’s new budget could affect research and support programs that farmers need.
November 05, 2025 12:40 PM
·
