'Agriculture and Rural America Lost:' Statement by The Farm Credit Council on House Vote to Strike Farm Credit Provisions From the Farm Bill

By Ken Auer, President and CEO, The Farm Credit Council

“Last night, U.S. agriculture and rural America lost. The House of Representatives approved by voice vote an amendment to strip provisions that would have strongly supported Congress’ renewable fuels goals and provided new growth opportunities for agriculture and rural communities. The passage of the Frank/Bachus amendment means less capital available for renewable energy, fewer competitive mortgage options for moderately-priced home buyers in rural communities, and fewer opportunities for lower-income Americans to utilize USDA’s guaranteed loan programs.  All of this was brought to you by the vitriolic and disingenuous opposition promoted by an entirely self-interested banking lobby.”

“Ironically, this vote came on the very evening the stock market dropped more than 300 points, largely on news that home mortgage financing and credit for new business ventures are rapidly drying up. Rural America always is hurt first by these types of changes. The Farm Bill provisions killed by the Frank/Bachus amendment would have provided rural areas with some modest help to address this downturn in credit availability.”

“In contrast to the support for the commercial banks, more than 550 organizations with a stake in the future success of U.S. agriculture and rural America voiced their support for modernizing Farm Credit’s authorities. These groups include agriculture, commodity and livestock groups, rural business groups, and many others at the national, regional and local levels. They have expressed their support because they share a vision for a prosperous future for agriculture and rural communities. The banking lobby’s priority is clearly on preserving the franchise of their well-heeled members so that local community banks are best positioned to be bought out, leaving rural communities with a mega-bank’s ATM and profits moved out of town.”

“Economists at USDA’s Economic Research Service have concluded that rural banks charge higher interest rates on loans, pay lower interest rates on deposits, and take fewer risks, while averaging a higher rate of return on assets than urban banks, according to a 2005 article in Choices magazine authored by Iowa State University economists.  The congressional banking committees ought to be asking bankers hard questions as to why this is so.”

“Congress can make great progress toward meeting the changing needs of U.S. agriculture and rural America, and Farm Credit will continue to work with lawmakers to address these needs.”

(Fore more information, visit The Farm Credit Council's website at www.fccouncil.com.)