A coalition of 21 farm groups is urging Congress to provide adequate resources for USDA’s Farm Service Agency so it is able to meet the demand for farm loans and provide mediation services to struggling farmers.
In a letter dated June 14, the coalition wrote, “With the farm economy only expected to worsen, access to credit, specifically credit provided through the U.S. Department of Agriculture (USDA) Farm Service Agency’s (FSA) Farm Loan programs, is critical.”
The letter was addressed to Sen. Thad Cochran, chairman of the Senate Appropriations Committee; Sen. Patrick Leahy, vice chairman of the Senate Appropriations Committee; Rep. Rodney Frelinghuysen, chairman, House Appropriations Committee; and Nita Lowey, ranking member, House Appropriations Committee.
The coalition thanked appropriators for providing additional funding for FSA’s Farm Loan programs in 2017, noting that the increase was an important and necessary step in ensuring access to credit.
“The outlook for 2017 grain and livestock prices appears to be no better than in 2016, likely meaning FSA loans will be even more vital to the financial viability of farm and ranch operations. The added funding will help FSA avoid backlog issues faced last year and during the beginning of this year.”
But the group stressed that there is no end in sight to the depressed farm economy, and loan demand is expected to be as high, if not higher, than last year.
“Metrics associated with farm health, including debt to asset ratios, working capital, and cash flow, are projected to weaken further in 2017 or stay even from last year,” noted the letter. “As a result, we expect demand for new or revised loans to at least match 2016, which was a record year for the portfolio. In order to meet demand, FSA will need additional resources for FY-2018.”
“Low commodity prices have reduced net farm income by over 50% in the past four years, and FSA loans serve as an important lifeline for many distressed producers. Inadequately funding FSA would be a disservice to our hardworking farmers and ranchers, who are dedicated to feeding our nation and the world.”
Source: NFU, ASA