WASHINGTON, DC - Today, Congressman Austin Scott (GA-08), Chairman of the House Agriculture Committee’s Subcommittee on Commodity Exchanges, Energy, and Credit, held a hearing to evaluate the effectiveness of farm bill authorized credit programs administered by the Farm Service Agency (FSA). Members of the committee heard from a panel of credit institution representatives who gave their perspectives on current credit conditions as well as how credit programs impact credit availability for farmers, ranchers, and forest owners.

Click here to watch Subcommittee Chairman Scott’s opening remarks.

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Today’s hearing continues a series to set the stage for the next farm bill. More information on today’s hearing as well as written testimony provided by the witnesses can be found by clicking here. Click here to watch the full archived webcast.

Below are excerpts from Subcommittee Chairman Scott’s opening remarks:

“Due to this state of the rural economy, access to credit is even more essential to keep farmers and ranchers producing a safe, affordable, and abundant supply of food and fiber for America and the rest of the world.

“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.

“In addition to providing access to credit, we must ensure that responsible agricultural credit policies currently in place are working, and providing the liquidity producers need to meet day-to-day operating expenses.

“Given the downturn in the farm economy and the eroding of cash reserves, securing credit has been a challenge for many, but especially for producers just getting their start. These beginning farmers have not been farming long enough to build up reserves for the lean times that inevitably come in production agriculture.

“The Farm Service Agency (FSA) is a lender of first opportunity, and has targeted funding for beginning and socially disadvantaged farmers and ranchers to assist in developing the next generation of agriculturalists. FSA’s direct and guaranteed loans enable farmers and ranchers to gain or continue financing despite volatile commodity markets.

“The Agriculture Act of 2014 included several provisions to provide opportunities for young and beginning farmers, including permanent authorization of a microloan program and cooperative lending pilots to meet the needs of smaller projects. Additionally, the bill included the elimination of term limits on guaranteed operating loans, which has given FSA and lenders the certainty they need to work together to graduate participants to commercial lending institutions.

“However, many farmers and ranchers are unable to access credit through traditional loans, and FSA loan requests have increased dramatically. According to USDA, as of September 2, 2016 FSA had a backlog of 1,900 approved but unfunded loans, projecting a 30% shortfall of funds for the end of the fiscal year.

“As we approach farm bill deliberations, we need to prioritize access to credit. Along with a strong safety net and crop insurance, credit availability is a tool we cannot afford to lose.

“Modern farming requires modern financing, and I look forward to a great discussion on the program changes necessary to keep pace with the needs of producers of all sizes.”

 Click here to read Subcommittee Chairman Scott’s full opening remarks.

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