ICBA this week urged a House agriculture subcommittee exploring ag credit issues to adopt a broad set of policies to rejuvenate the farm economy and rural America. “In addition to a sizeable economic assistance package for the current crop year, we need a new farm bill that provides farmers and bankers with more predictability, higher income payments when prices fall and that works hand in hand with an aggressive U.S. Trade Policy,” stated Dale Leighty, president of the First National Bank of Las Animas, Colorado, and chairman of ICBA’s Agriculture-Rural America Committee.
Leighty urged actions on five policy fronts: 1) pass a fourth consecutive farm aid package, 2) pass a new farm bill that includes counter cyclical payments that fluctuate inversely with crop prices, 3) provide full funding and new authorities for USDA guaranteed loan programs, 4) complement domestic farm policy with an aggressive U.S. trade policy that includes Trade Promotion Authority (TPA), and 5) diversify rural America without undermining the private sector.
Leighty asked Congress to assist rural citizens by significantly increasing deposit insurance coverage and indexing the coverage level to inflation. He also asked that the new farm bill significantly increase funding for USDA’s Business and Industry (B&I) loan program and provide enhancements and backup funding for guaranteed farm loans. Leighty told the committee that increasing deposit insurance levels was necessary to help rural banks grow their core deposit base and keep money working in local communities. “Money leaving rural communities cannot be reinvested, which only exacerbates the cycle of less investment opportunity in rural towns and more population flight. New funding sources must then be found by community banks to make up for this loss. It is very much a farm and rural policy issue. Deposit insurance hasn’t been increased since 1980 and its value has been eroded in half. It’s time to do something.”
Leighty urged passage of credit and rural development authorities that do not undermine the private sector, noting that the Farm Credit System, a government sponsored enterprise, has asked for new lending powers. “New powers for the FCS that allow them to simply use their GSE advantages to cherry pick loans already being made by the private sector does not expand the economic base of rural America or attract new business to small rural communities,” said Leighty.