The agricultural provisions in the recently enacted budget reconciliation bill will provide a strong backstop for agricultural producers, but a long-term Farm Bill is still needed, Clint Hood, SVP for Synovus Bank in Dublin, Georgia, told House lawmakers today.
Hood, representing the American Bankers Association, testified before the House Agriculture Subcommittee on General Farm Commodities during a hearing on the importance of credit and risk management in financial farm operations. In his testimony, Hood noted that banks remain a primary source of credit to U.S. farmers and ranchers, but the agricultural economy is experiencing headwinds and economic assistance can provide some relief.
“Bankers continue to monitor the agricultural economy, and we are very cognizant of how economic headwinds affect our customers and our communities where we live and serve,” Hood said. “While both of these steps were needed and appreciated, Congress has several tools to help the farm economy – starting with the passage of a strong and durable Farm Bill.”
The reconciliation bill contains a partial version of the Access to Credit for our Rural Economy Act, as well as provisions from the Farm Bill, that will lower the cost of credit and make credit more widely available, he said. Still, the Farm Bill provides an opportunity to make needed changes to the credit title, including increased limits for the Farm Service Agency guaranteed loan programs, changes to the bona fide operator definitions, and modifications to Farmer Mac eligibility.
“Bankers commend the inclusion of increased reference prices and increased cost share for crop insurance programs, among the many other positive provisions” in the reconciliation bill, Hood said. “However, changes are still needed in the credit space to provide farmers and ranchers with the credit they need to work through the current downturn in the agricultural economy.”
