WASHINGTON DC - The Independent Community Bankers of America® (ICBA) urges Congress to adopt a new long-term farm bill incorporating five broad goals and offered enhancements to USDA programs to prevent a farm credit crisis.
Testifying before the Senate Agriculture Committee’s “Commodities, Crop Insurance & Credit” hearing, ICBA witness Brenda Kluesner, a loan officer and crop insurance manager for Royal Bank in Cassville, WI, advocated for Congress to adopt a dynamic new multi-year farm bill upon expiration of the current bill to provide continuity and enable agricultural producers and their lenders to engage in multi-year business decision making.
Kluesner urged Congress to authorize permanent funding mechanisms for USDA farm loan programs and USDA’s Business and Industry program in years where demand for program loans exceed appropriated funds. She also noted more robust and better-financed USDA guaranteed lending programs through the 2018 farm bill will help avoid a farm credit crunch and prevent an exodus of producers from the agricultural sector.
ICBA’s five principles for consideration in the next farm bill include:
- providing producers ample funds for commodities, crop insurance and credit programs to help them weather a potential farm income or farm credit crisis,
- considering any program changes, including outside the current farm bill, that benefit producers and their community banks,
- directing agencies to reduce regulatory burdens and prohibit regulations not based on statutory language or that add unnecessary regulatory burdens,
- requiring federal agencies’ rules to treat all categories of program participants fairly, and
- requiring direct loan programs to compliment, not undercut, private sector lending.
To meet the growing demand for these programs, Kluesner encouraged Congress to provide adequate funding, raise loan limits, minimize origination fees and paperwork requirements, and provide uniform financing requirements for USDA loans across state lines in addition to other recommendations.
“Congress has the power to help avoid a farm credit crisis,” Kluesner said. “A strong farm safety net for commodities, and a strong crop insurance program, are both vital to producers and community banks. By enhancing, streamlining and adjusting the USDA guaranteed lending programs in the next farm bill, we will ensure that they fulfill their potential to be a key component of the farm safety net and help prevent the next farm credit crisis.”