House Ag Committee Hearing: The Importance of Credit and Risk Management

On July 16, the House Agriculture Subcommittee on General Farm Commodities, Risk Management, and Credit hearing titled, “Financing Farm Operations: The Importance of Credit and Risk Management.” This hearing focused on the severe downturn in the agricultural economy, with witnesses drawing direct parallels to the 1980s farm crisis.

The central message was that high input costs and depressed commodity prices – resulting in paper losses of “$180 per acre” for crops like cotton, as noted by Subcommittee Chairman Scott (R-GA-8) – have rendered the 2018 Farm Bill’s safety net inadequate. Witnesses and members agreed that ad hoc disaster aid is an unsustainable model and that a predictable, modernized farm bill is urgently needed. The most emphasized issue was the critical need to reform Farm Service Agency (FSA) loan programs. Witnesses and members identified the programs as essential but also “slow and burdensome.” Unanimous calls were made to increase FSA loan limits, which Rep. Bost (R-IL-12) stated farmers hit “very quickly,” and to streamline the application process.

A key question driving the discussion was what specific, actionable changes – beyond just funding increases – could make federal credit and risk management tools more effective and accessible, particularly for beginning farmers who face daunting entry costs.