Help is on the way.
On March 17, Reps. Ron Kind (D-Wis.) and Randy Feenstra (R-Iowa) introduced the Enhancing Credit Opportunities in Rural America (ECORA) Act of 2021 in the House of Representatives, bringing it a step closer to law. Any representative who supports ECORA deserves praise, but Congressmen Kind and Feenstra deserve special commendation for taking the lead to provide support for farmers.
ECORA is a simple but powerful bill that will increase the flow of credit to all farmers. It removes a tax on income derived from farm real estate loans that are made by community banks. In doing so, it increases liquidity, meaning more loans for farmers.
Government-sponsored enterprises for agriculture have long enjoyed this incentive. Other lenders are not so lucky. And while they lose out, farmers, ranchers and producers lose out too. There’s no reason for Farm Credit to have a leg up on other lenders, especially when the advantage—if granted to all lenders—would mean more credit for farmers.
With farmers likely to see a decrease in net farm income of nearly $10 billion in 2021, access to credit will be more important than before. Operating budgets will be strained, farmers and producers will be looking for credit and lenders should be empowered to provide it. Farm Credit isn’t getting the job done alone. Kansas recently recognized this and enacted a bill similar to ECORA on the state level.
While Kind and Feenstra deserve special commendation for their support for farmers, they also deserve praise for leveling an uneven playing field that ends up benefiting Farm Credit at the expense of America’s farmers and producers. All members of Congress should sign on to this simple, powerful legislation and pass it into law.