Ag Committee Approves Bipartisan Legislation to Reauthorize and Improve the Commodity Futures Trading Commission
The House Agriculture Committee approved H.R. 4413, the Customer Protection and End-User Relief Act, by voice vote.
Tamara Hinton, 202.225.0184
WASHINGTON – Today, Rep. Jeff Fortenberry, Chairman of the House Agriculture Committee's Subcommittee on Department Operations, Oversight, and Credit held a public hearing to learn more about how credit programs are working for farmers and how they should continue in the 2012 Farm Bill.
Two of the witnesses, a beginning farmer from Nebraska and an urban farmer from Ohio, explained how important it is for agricultural producers to have access to credit to both start and support their operations because of the risks inherently involved with farming. While other witnesses representing the Farm Credit System and commercial lenders described the important role they play for economic growth in rural communities.
A number of institutions provide credit to our nation's farmers, ranchers, and rural constituents. 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, certain agriculture-related businesses, and rural homeowners. The Federal Agriculture Mortgage Corporation ("Farmer Mac") 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 (USDA) 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 farmers and ranchers who do not have the required resources to obtain financing from FCS or commercial lenders. Additionally, local banks provide an important source of credit for rural constituents.
"Today we heard that ensuring a stable food supply is directly connected to farmers and ranchers having access to steady sources of credit. It is especially important for our nation’s beginning farmers and ranchers, who are just starting their operations. As we prepare to write the next Farm Bill, it is critical that we continue to provide a credit system that meets the needs of our agricultural producers and rural communities," said Chairman Jeff Fortenberry (R-NE).
"I was particularly pleased to have an urban farmer and entrepreneur, Mr. Michael Walton from Cleveland, provide my colleages a different perspective. Urban farmers are legitimate agricultural producers who happen to live and farm outside of the traditional rural environment. They are filling an increasingly important role in the economic well being of urban areas, and provide healthy nutrition for many who would otherwise not have access to it. They are doing this without the same resources afforded to traditional farmers such as credit. As we update the Farm Bill, I am urging my colleagues to give serious consideration to the needs of urban farmers. Access to credit can make or break rural farm operations, and urban farm operations are no different," said Ranking Member Marcia L. Fudge (D-OH).
Written testimony provided by the witnesses is linked below.
Mr. Bob Frazee, President and CEO, MidAtlantic Farm Credit, on behalf of Farm Credit Council, Westminster, Maryland
Mr. Jeff Gerhart, Chairman, Bank of Newman Grove, on behalf of Independent Community Bankers of America, Newman Grove, Nebraska
Mr. Matthew H. Williams, Chairman and President, Gothenburg State Bank, on behalf of American Bankers Association, Gothenburg, Nebraska
Mr. Michael Walton, urban farmer, Owner, Tunnel Vision Hoops, South Euclid, Ohio
Mr. Justin D. Doerr, beginning farmer, Plainview, Nebraska