Agricultural Interest Rate Relief Act of 1987

Agricultural Interest Rate Relief Act of 1987 - Title I: Agricultural Loan Interest Subsidy Program - Directs the Secretary of Agriculture to establish a Federal-State-Lender cooperative agricultural loan interest subsidy program to run through September 30, 1988.

Sets forth borrower eligibility criteria, including a prohibition on borrowers who produce commodities on highly erodible land or converted wetland.

Provides, with regard to such program, that the interest rate shall be written down as follows: (1) three percentage points shall be paid by the Federal Government; (2) between one and two percentage points may be paid by a State; and (3) one percent of interest shall be paid or at least 15 percent of the principal shall be cancelled by the lender.

Sets maximum aggregate loan principal at $400,000 for an individual and $600,000 for a family corporation or partnership.

Authorizes FY 1987 through 1990 program appropriations. Limits maximum aggregate fiscal year payments to $600,000,000.

Requires States to submit a program plan to the Secretary for approval. Sets forth plan requirements, including the designation of a State administering agency.

Title II: Farm Credit System Borrowers - Subtitle A: Farm Credit System Loan Restructuring Program - Requires a Farm Credit System (System) institution to restructure, rather than foreclose, a loan to an eligible borrower if foreclosure costs equal or exceed restructuring costs. Sets forth borrower eligibility criteria and related appeal procedures.

Requires the Farm Credit System Capital Corporation to reimburse an institution for the amount of principal due on loans reduced by the institution if necessary to avoid insolvency or liquidation.

Requires the Chairman of the Farm Credit Administration Board to submit a program report to the Congress within 270 days.

Subtitle B: Farm Credit System Reform - Amends the Farm Credit Act of 1971 to require System institutions to provide borrowers with access to appraisals.

Encourages System institutions to permit foreclosed borrowers to retain possession of their principal residences and a reasonable amount of adjoining land.

Prohibits a System institution from raising the interest rate on a loan that has been reclassified as a risk or problem loan.

Directs the Farm Credit Administration to make periodic determinations of System financial assistance needs.

Limits System institution operating expenses to one percent above the average cost of System-issued bonds.

Directs the Farm Credit Administration to issue regulations regarding the disposition and leasing of acquired farmland. Directs System institutions to give sale or lease priority to family-sized farms and to original owners or operators.

Requires a borrower to buy System stock in order to be eligible to obtain a loan or to purchase by installment System-held farmland.

Subtitle C: Farm Credit System Associations - Amends the Farm Credit Act of 1971 to prohibit district banks from charging associations that have voted against merging with other associations higher interest rates or assessments than are charged to other similar associations.

Title III: Farmers Home Administration Borrowers - Requires the Secretary to restructure, rather than foreclose, a loan made under the Consolidated Farm and Rural Development Act if foreclosure costs equal or exceed restructuring costs. Sets forth borrower eligibility criteria and related appeal procedures.

Prohibits the Secretary from requiring additional loan collateral if the borrower is current in the payment of principal or interest.

Directs the Secretary to submit a program report to the Congress within 270 days.

Amends the Consolidated Farm and Rural Development Act to authorize loans to farmers and ranchers for alternate crop production (as defined by this Act).

Title IV: Miscellaneous Provisions - Provides for the establishment of an Inter-Agency Agricultural Task Force to assist commercial agricultural banks and borrowers to resolve present economic problems and to facilitate commercial bank lending to agriculture in the future. Requires semiannual reports to the appropriate congressional committees.

Authorizes appropriations.

Title V: Emergency Assistance for Certain Agricultural Producers - Makes the 1987 wheat crop eligible for disaster assistance under Public Law 99-500 (see Public Law 99-591 for updated version of Public Law 99-500).

Directs the Secretary to make production adjustments to reflect any quality reductions caused by adverse 1986 conditions. Requires disaster claims to be filed by May 31, 1987.

Title VI: Rural Electrification and Telephone Systems Loan - Amends the Rural Electrification Act of 1936 to permit Rural Electrification Administration borrowers to prepay Federal Financing Bank loans without penalties if: (1) private capital is used to replace such loans; and (2) any savings will be used to avoid future rate increases, passed on to customers, or used to improve the borrower's financial strength.

Permits the transfer of specified amounts of such funds to the Commodity Credit Corporation and the Agricultural Credit Insurance Fund for the credit restructuring and disaster payment programs provided for by this Act.