In over thirty years of financing agricultural I have originated farm loans, agricultural land loans, Ag Land purchase loans, and dealt with a host of Farm Loan Programs. Some of which have been government programs and others programs we have established in our bank. In the banks I was affiliated with the farm loan programs were the most popular.
Most of the long term agricultural land loans before the late 1980s were originated by the Federal Land Bank and some Insurance companies. Then during the farm crisis of the late 80s Farmer Mac was started. The purpose was to be able to poos and secure ag land purchase loans and sell just as Fanny May was doing with home loans. Now the Federal Land Bank is known as Farm Credit Services and is making long term agricultural land loans, along with Farmer Mac, and some insurance companies.
Interest rates tend to be usually 2 or maybe more points higher for these commercial farm loan programs. The rates would be on a par with other commercial long-term loans. Long term loans would be defined as loans with an amortization of 25 years or more.
The Agricultural Banks would be primarily in the rural areas and tend to be smaller banks. However, with the amount of money needed by these larger farming operations these small banks sometimes must rely on larger city banks to assist them with the farm loan programs.
Financing farmers and agricultural enterprises is challenging for agricultural banks. Getting adequate security on farm land loans is not difficult as you can take a mortgage on the land and be secure.
However, getting a secure position while financing livestock, machinery, and growing crops is more difficult. Unlike automobiles large pieces of equipment do not require titles that you can hold. You only must rely on serial numbers posted on the equipment etc.