A proposed change to Chapter 12 of the Bankruptcy Code could have adverse effects for the nation’s agricultural producers, the American Bankers Association said in a statement for the record in a House Judiciary Subcommittee hearing held today.
In a letter to the heads of the financial regulatory agencies on Friday, the American Bankers Association called for greater clarification on how banks may serve businesses dealing with hemp.
As bankers know all too well, farmers and ranchers are suffering from a sustained period of low commodity prices, rising input costs, heavy rains and flooding, and more recently, trade issues that are harming agricultural exports. Not surprising, those factors have hurt farm income, which peaked in 2013. As in past cycles, sustained declines in farm income lead to increased cash-flow problems for farmers and ranchers, which in turn lead to rising credit-quality problems for ag lenders. Even though the FCS focuses on lending to financially stronger farmers, a key question is how well the FCS is acknowledging growing credit-quality problems in its loan portfolio and/or shedding weaker credits by calling loans and not renewing lines of credit.
Read more from ABA’s Hugo Dante.
Farm banks remain in a strong position despite a recent uptick in farm loan delinquencies.
The American Bankers Association wrote to Sen. Pat Roberts (R-Kan.) today expressing support for his bill, S. 1641, which would amend the Internal Revenue Code to exclude from gross income interest received on certain loans secured by agricultural real property.
A recent Farm Credit System loan for $2 million to finance a new Exxon gas station and convenience store in Sheridan, Wy., is almost certainly another example of an FCS lending abuse. This gas station is located at an Interstate highway interchange in a city with a population of about 18,000. While some farmers and ranchers may patronize the gas station and store, they are more likely gas up at a nearby farm co-op store.
The 2018 Farm Bill offers bankers many new ways, not all of them intuitive, to help their customers.
Dallas Tonsager, chairman and CEO of the Farm Credit Administration died of lymphoma on May 21; he was 64. Tonsager was appointed to the FCA board by President Barack Obama on March 13, 2015, and designated by President Obama as chairman and CEO on November 22, 2016. Tonsager grew up on a dairy farm near Oldham, S.D., and later graduated from South Dakota State University with a Bachelor of Science degree in agriculture. Apart from serving on the FCA board, Tonsager’s public service included serving as the USDA’s undersecretary for rural development, a director of the Commodity Credit Corporation and USDA’s state director for rural development in South Dakota.
In a comment letter to the Farm Credit Administration today, the American Bankers Association called on the agency to make changes to how it reports data on young, beginning ad small farmers.