Opening Statement: Republican Leader Glenn "GT" Thompson Full Committee on Agriculture Hearing: “A 2022 Review of the Farm Bill: The State of Credit for Young, Beginning, and Underserved Producers”
Washington, July 14, 2022
Remarks as prepared for delivery:
Chairman Scott, thank you for convening this important hearing to discuss credit issues in rural America. For any agriculture operation, one of the most critical relationships a farmer may have is with his or her lender. This is especially true for our young and beginning producers.
Farming is capital intensive; the cost of entry is incredibly high and can act as a barrier to entry for these new agriculturalists trying to start or grow their farm operations. Unfortunately, because of the significant financial risk, some new borrowers are unable to secure commercially available credit, which is where the critical credit programs authorized by the Farm Bill step in.
Direct and guaranteed ownership and operating loans delivered by the Farm Service Agency can provide the necessary funds to start or grow a farm operation and set asides for beginning farmers and ranchers to ensure new operations have access to these loans.
As a part of the discussion today, I hope to learn what impact inflation is having on the financial health of our farmers. The announcement yesterday showing the consumer price index up 9.1%, the highest rate in 41 years, has me incredibly concerned for the future of farm operations and for the ability of these credit programs to continue to provide the necessary funding for operations in this high-cost environment.
For me, the measure of success of our credit programs is the ability of borrowers to utilize their loans to get their operations on solid financial footing and eventually obtain access to commercially available credit. With soaring costs, I fear we may be going the opposite direction over the next several years, and we must ensure our credit title is adequate to weather this storm.
As many may know, the average age of a farmer is 57.5 years and is on an upward trend. FSA’s credit programs can play a role in helping farm operations transition to the next generation, but we cannot examine them in a vacuum. Rather than simply pushing programs that allow producers to borrow more, the Committee should also be seeking solutions that help things cost less and reduce the reliance of young and beginning farmers on government loans.
Mr. Chairman, I would ask unanimous consent to enter into the record a letter that I, Leader McCarthy, and 94 House Republicans sent to President Biden on June 14th.
This letter identifies tangible steps the Administration could take immediately to address rising farm input costs and provide regulatory certainty for our producers. Reducing these costs will help all farmers, ranchers, and eventually consumers, but those who would see the biggest positive impact would be our young and beginning producers.
Many farmers and ranchers will borrow more in each growing season than the average American will borrow in their lifetime. But year in and year out, our producers take this huge financial risk because they believe in the work they are doing, they believe in living and raising a family in rural America, and with the right combination of policies—including our credit programs—we can help our farmers feed and clothe this nation and the world.
Thank you to the witnesses who are here today. I look forward to hearing your testimony, and Mr. Chairman I yield back.