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.
Subcommittee Examines Credit Availability for Agricultural Producers
Tamara Hinton, 202.225.0184
WASHINGTON – Today, Rep. Eric A. "Rick" Crawford, Chairman of the House Agriculture Committee's Subcommittee on Livestock, Rural Development, and Credit held a public hearing to review credit availability in rural America. Several institutions provide credit to our nation's farmers, ranchers, and rural constituents. It is important to ensure credit is readily available through fundamentally sound institutions.
Congress established the Farm Credit System (FCS) in the Federal Farm Loan Act of 1916 to provide a reliable source of credit to agricultural producers, input suppliers, cooperatives, and rural homeowners. The Federal Agriculture Mortgage Corporation ("Farmer Mac") was established in 1988 and provides credit for agricultural real estate, rural housing, and rural utility loans on the secondary loan market. Both FCS and Farmer Mac are regulated by the Farm Credit Administration (FCA), which is an independent federal agency.
The U.S. Department of Agriculture Farm Service Agency (FSA) provides direct and guaranteed loans to producers who cannot obtain credit from commercial lenders. Much of the loan dollars from FSA are reserved for beginning and socially disadvantaged farmers and ranchers who do not have the required resources to obtain financing from FCS or commercial lenders.
Additionally, local banks provide a significant amount of credit for rural communities.
Members of the Subcommittee heard from two panels of witnesses that included representatives from FCA, FSA, the Federal Reserve Bank, Farmer Mac, and local banks. They provided insight into the availability of credit for producers and the potential risks.
"I believe it is important to hold hearings like the one today because the farm credit landscape is always changing. As we know, the agricultural economy is highly cyclical – eventually interest rates will go up, and record-high commodity prices will come down. In fact, after a recent period of historic highs, crop prices have declined, and farmland values are slightly decreasing. In order to sustain an abundant supply of food and fiber well into the future, we must ensure that responsible farm and agricultural credit policies are in place," said Chairman Eric A. "Rick" Crawford.
"It is imperative that our farmers, ranchers and dairy producers have access to the resources necessary to produce the best and safest food and fiber in the world," said Ranking Member Jim Costa. "We must ensure that credit is available to our producers, as it is vital to the continued prosperity of the agricultural economy. Support programs, like the dairy program in the Agriculture Act of 2014, are essential reforms that will help bolster rural America and instill confidence in our agricultural economy."
Written testimony provided by the witnesses is linked below.
The Honorable Jill Long Thompson, Board Chair and CEO, Farm Credit Administration, McLean, Virginia
Mr. Chris Beyerhelm, Deputy Administrator for Farm Loan Programs, Farm Service Agency, U.S. Department of Agriculture, Washington, D.C.
Mr. Nathan S. Kauffman, Assistant Vice President, Federal Reserve Bank of Kansas City, Omaha Branch, Omaha, Nebraska
Mr. Bob Frazee, President and CEO, MidAtlantic Farm Credit, ACA, Westminster, Maryland; on behalf of the Farm Credit System
Mr. Timothy L. Buzby, President and CEO, Farmer Mac, Washington, D.C.
Mr. Leonard Wolfe, President and CEO, United Bank & Trust, Marysville, Kansas; on behalf of the American Bankers Association
Mr. Sean H. Williams, President and CEO, The First National Bank of Wynne, Wynne, Arkansas; on behalf of the Independent Community Bankers of America
Mr. Brett Melone, Loan Officer, California FarmLink, Santa Cruz, California; on behalf of the National Sustainable Agriculture Coalition