The Farmers Home Administration (FmHA) was created in 1946 to serve as a source of aid for small farmers affected by the Great Depression. This federal agency remained in place to provide loans, grants, and disaster relief to farms and rural communities in the United States for nearly fifty years. The FmHA was responsible for aiding farmers and rural residents by extending them credit and providing guidance in the lending process.

The FmHA was an important resource to farmers and rural communities, especially those with limited access to other credit. It provided farmers with loans to purchase land and pay for agricultural related expenses, including operating costs and equipment. These loans would often serve as a lifeline for farmers struggling with the debt related to purchasing their land or dealing with the aftermath of a natural disaster. The FmHA was also a resource for farmers who were unable to obtain loans from other sources due to limited credit or income.

The FmHA also provided community development grants in order to support development in rural areas. These grants were used to build roads, water and wastewater systems, as well as community centers. The FmHA conducted research on agricultural practices and encouraged the participation of minority farmers in the process of acquiring land grants.

The FmHA was an effective source of aid for small farmers and rural communities until the 1990s when problems began to arise due to weak lending practices. According to the U.S. Government Accountability Office, the agency was flawed in several areas – failing to properly measure ability to pay and financing risky lending schemes.

Due to these issues, the FmHA was abolished in October 1994 and its functions were transferred to the Rural Development agency of the U.S. Department of Agriculture. This agency remains in place to this day and provides loans, grants, and disaster relief for rural communities.

The legacy of the Farmers Home Administration remains in place as the USDA Rural Development. This agency continues to administer the same types of loans, grants, and disaster relief that were provided by the FmHA. Through the USDA Rural Development, agricultural producers and rural communities are able to take advantage of the same type of opportunity that was available through the Farmers Home Administration to help their agricultural endeavours and support rural development.