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 (KMAland) -- One of the top points of
discussion at this year’s American Bankers Association’s Ag Bankers
Conference was the 2023 Farm Bill.
Ed Elfmann, Senior Vice President for Ag and Rural
Banking Policy at the ABA says, despite what many think, a large portion of
the banking industry is connected to rural America, and the Farm Bill has a
direct impact on those local economies.
“There's eleven titles in the Farm Bill, and I
think we care about ten of them, right? We care about rural development, we
care about the conservation programs, we care about the credit. There's a
credit title on the Farm Bill, and a lot of people don't even realize that,
so we care about the credit title, what happens there.”
When it comes to the production side of the Farm
Bill, Elfmann says there are several issues bankers are watching for next
year. He notes while bankers don't necessarily advocate for direct payments,
or ARC or PLC, they look at how decisions made in the Farm Bill will impact
lenders.
"I always jokingly say with my folks that
we're like the third person to be hit by this thing because if you change a
commodity program and it changes the customers cash flow, then that affects
us bankers. So, it's a weird spot to be for me because I'm not actually
talking about one particular thing. I have to look at unintended and intended
consequences.”
One of the biggest things the banking industry
will advocate for is crop insurance. He adds that they are also supporters of
the dairy insurance programs. Then there’s the credit title in the Farm Bill.
"That's where you see the FSA guaranteed
loan programs, and a lot of our lenders participate in the guaranteed
loan programs because it's a way to either get beginning farmers in and have
them be able to acquire some credit they might not otherwise be able to
acquire, or you might have somebody who has a dip in their operation, and
they need to use the programs. That's a way to carry them through and make
sure that they're still in a good place, so we're big supporters of the
guaranteed loan programs. We haven't picked a number yet, but we do believe
the programs need to get bigger. The lending limit is about $1.88 million,
and we'd like to see that get over the $2 million mark, partly because farms
are getting bigger.”
Elfmann adds that rural bankers also use the Rural
Development Programs quite a bit for a variety of on-farm, as well as
off-farm efforts that better small town communities.
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(KMAland) -- One of the top points of
discussion at this year’s American Bankers Association’s Ag Bankers
Conference was the 2023 Farm Bill.
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