Agriculture remains one of the few bright spots in America's economy. Heartland states like Nebraska, where one in three jobs is related to agriculture, are among the top states in terms of fiscal health and small business entrepreneurship. This can be credited largely to a common sense approach to budgeting and a significant personal investment in the success of the family farm.
Maintaining a fiscally sound agricultural operation is no small task given the large overhead and startup costs like land and equipment. On Thursday of last week, I chaired the hearing of a House Agriculture Subcommittee to review the status of credit available for current and emerging ag producers to help address initial operating expenses.
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. Other witnesses representing the Farm Credit System (FCS) and commercial lenders described the important role they play for economic opportunity in rural communities.
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.
At the hearing, we heard that ensuring a stable food supply is directly connected to farmers and ranchers having access to steady sources of credit. We also explored how access to essential ag financing could be improved in the upcoming Farm Bill. As we prepare to write this important legislation, it is critical that we continue to provide a credit system that meets the needs of our agricultural producers and rural communities.
Three of the five witnesses at the hearing were from Nebraska. They shared their expertise and experience from both the lender and producer perspectives.