Congressman Sanford Bishop (D-GA), Chair of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Subcommittee, delivered the following remarks at the Subcommittee's oversight hearing on The Rural Economy.
Good afternoon and welcome to today’s hearing.
Today we are examining the state of the rural and farm economies through the lens of farm credit.
To help us understand the challenges and opportunities our farmers and rural communities face, we are joined by Glen Smith, Board Chairman and CEO of the Farm Credit Administration, and Jeff Hall, Chairman of the Farm Credit System Insurance Corporation. We are glad to have you back with us once again, I know we juggled the schedule a bit to have this hearing and I appreciate your flexibility.
Last year, we held a budget hearing with the Farm Credit Administration before the entire landscape changed due to COVID-19. Just weeks after that hearing, there were reports of farmers dumping thousands of gallons of milk and plowing under acres of produce. But even before the pandemic, the farm sector was facing many challenges including trade uncertainties, large commodity supplies, weak prices, extreme weather, and high levels of debt and bankruptcy.
In fact, in your testimony last year, you noted that federal farm subsidy payments, crop insurance, and particularly Market Facilitation Payments were the difference between a net operating loss and breaking even for many farm operators.
That was indeed true last year. In addition to MFP payments, which aided farmers directly impacted by retaliatory tariff, USDA also provided assistance through the Coronavirus Food Assistance Program (CFAP) for agricultural producers affected by the coronavirus pandemic. According to the Economic Research Service, direct government farm payments totaled $46 billion in 2020.
Looking forward to this year, there will likely be a large drop in direct government payments, but you note that you expect gross farm income to remain the same and net farm income to decline only slightly.
Finally, in all of this, I do not want to lose sight of young, beginning, and small farmers. In 2019, the number of loans as well as the dollar volume of those loans going to these three groups increased. While this is a hopeful sign, we know that beginning farm households have less wealth and have more debt relative to their assets than established farms. Ensuring our beginning and small farmers have access to resources is vital to the strength and future of the farm and rural economies.
Our farmers, ranchers, and producers are resilient, but the last several years have been uniquely challenging. I am cautiously optimistic that this year will bring more stability. I want to thank all our witnesses for being with us today, and I look forward to today’s discussion.
Source: U.S. Department of HCA
