Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
Measure Bridges Farm Credit Gap
To bridge the gap in guaranteed farm loan funds exhausted last month, the U.S. House of Representatives considers H.R. 882 Tuesday afternoon, which would make $470 million available immediately out of other unused USDA farm loan funds. This is a stop gap measure to meet pressing credit needs, while supplemental loan authority is addressed by the President and Congress.
The bipartisan measure was introduced by Agriculture Committee Chairman Larry Combest (R-Texas), Ranking Minority Member Charlie Stenholm (D-Texas), Vice Chairman Bill Barrett (R-Nebraska) and U.S. Representative David Minge (D- Minnesota).
Currently, there are approximately $470 million targeted for loans to beginning farmers and ranchers that remain unused. However, funds for regular guaranteed loans are already exhausted in many states because of the extraordinary demand that exists for financing this year's agricultural operations. Under the law, these funds may not be reallocated to another loan category until April 1. H.R. 882 is a one-time exemption to the April 1 wait, and would free up dollars 30 days earlier for funding the guaranteed farm ownership and operating loan programs.
"Farmers cannot wait for Congress to pass and the President to sign a supplemental appropriations bill that he should have requested weeks ago. The demand for operating credit is now. Farmers and their lenders already have made their planting decisions. The funds to carry out those decisions need to be in farmers' hands now," said Chairman Combest. "Farmers and ranchers have been hit hard by severe drought and depressed markets. They are still feeling the effects of those circumstances as they try to secure financing to start again this year. Unfortunately, the forecast on the horizon for improvement does not look good."
"H.R. 882 will provide a bridge to agricultural producers and lenders until we are able to provide additional credit funds in a supplemental appropriations bill," said Congressman Stenholm. "While this legislation will help borrowers by providing immediate available credit for the guaranteed loan programs, it does not eliminate the need for Congress to provide additional emergency, direct operating and ownership loan funds."
"Of particular concern as we prepare for spring planting in Nebraska and other Midwestern states is the ability of producers to show an adequate cash flow as they meet with their lenders. This legislation would make valuable use of this money now as farmers are preparing for spring planting," said Congressman Barrett. "I would stress to my colleagues, however, that there is still a need for what the President requested in a supplemental. This legislation is not meant to replace a supplemental, but it will get producers through the next 30 days."