Opening Statements

Remarks as prepared for delivery:

Good morning.  Thank you, Chairman Scott for holding today’s hearing.

Our Committee has an obligation to proactively review the Farm Credit System to ensure its soundness. To help us do that today, we have brought representatives of the Farm Credit Administration, the independent agency tasked with regulating the Farm Credit Institutions, to ensure they fulfill their mission and stay within the scope of that mission.

The importance of the Farm Credit System is largely unknown to those outside the agricultural community. So, I am thankful that we have an opportunity today to highlight the System and its century-long mission of providing credit to agriculture and rural America during the good times and the bad, as well the role of the Farm Credit Administration in ensuring the soundness of the System and its lending practices.

Agriculture today is far more complex than it was 100 years ago. Providing credit to America’s farmers and ranchers is a necessary and serious challenge for many lenders in the United States. That challenge is heightened with the current struggles in the farm economy.

Net farm income is at all-time lows, and farm debt is forecast to climb to near an all-time high of $416 billion, up $100 billion in just six years. The value of farmers’ land also stopped gaining value over that time.

Add to that concerns about increasing Chapter 12 farm bankruptcies, which have reached their highest level since 2011, and we have good cause for a renewed focus on farm lending and oversight of our Farm Credit System.

In my home state of Georgia, we’ve had hurricanes and low prices that have added to farmers’ financial difficulties. I strongly encourage USDA to ensure that WHIP+ payments and state block grants are dispersed in a timely and efficient manner, and that farmers who have been impacted by our trading partners’ poor behavior receive complete MFP payments for 2019.

It is in times like these that our farmers and ranchers are most in need of reliable sources of credit at competitive rates. Thankfully we have a network of commercial and community banks, USDA loan programs, and the Farm Credit System that each play a crucial role in providing that access.

While Congress has generally outlined the authority by which the Farm Credit System may fulfill its ultimate mission of ensuring a dependable source of credit for agriculture and rural America, I realize that authority is not necessarily delineated with bright line rules. Therefore, we largely rely on FCA as the regulator to ensure that System banks are doing their part to stay within the bounds of the Farm Credit Act.

Today we will hear from Mr. Glen Smith, CEO and Board Chairman of the Farm Credit Administration. Thank you, Mr. Smith for being here today.  I appreciate you making time to appear before the Committee.