Congressional Republicans should introduce legislation to authorize a low-cost loan program\
It’s not necessarily an anecdotal problem, and I’m not advocating a new bureaucracy or any significant amount of government spending. Since farmers are responsible people and 99% of them are going to repay their loans, the expense of this program would be minimal and the benefits could be substantial. Commercial banks could administer this program at minimal cost to government and then shut it down after two years when farmers have recovered financially. Keep in mind that some of these farmers are going to lose hundreds of thousands of dollars in this collapse. From what I’ve read, a lot of their money was lost in bad trades by MF Global and they’re not going to get it back.
Another possibility, at even lower cost, would be to simply authorize government loan guarantees for loans to purchase seed and supplies, with a requirement that the loans be made at the lowest possible interest rates—around 2% or lower (which is feasible given that banks pay less than 1% for short-term funding today). Then commercial banks could handle the whole problem with very minimal government activity required. This is also a good justifiable way for the GOP to chop some political wood in an election year.