In a statement for the record before tomorrow’s House Agriculture Committee hearing on the rural economy, ABA called on lawmakers to ensure farmers’ ongoing access to adequate credit by updating the U.S. Department of Agriculture’s guaranteed farm loan programs.
While emphasizing the success of the 2018 Farm Bill, ABA noted some of the looming risks to the U.S. farm sector. These include a decline in commodity prices, rapid appreciation of farmland values in some areas and a scarcity of off-farm employment opportunities in rural areas. To mitigate these risks, the association called for farm program upgrades, such as modernized technology and increased staffing at FSA, a national-level approval process for the FSA guaranteed loan program and the return of FSA’s interest assistance program. In addition, the association voiced its support for a preferred lender program for rural development loan programs.
ABA also reiterated the role banks play as the primary source of credit to farmers and ranchers in the U.S. In direct competition with these banks, ABA warned, is the Farm Credit System, a large government-sponsored entity that has deviated from its statutory mission and is now serving primarily large borrowers at the expense of taxpayers. The association called for reforms to the FCS that would increase transparency and ensure that its activities remain in line with congressional intent.