What started as an attempt at some modest tinkering with the eligibility rules for farm loan programs has managed to unite congressmen who would ordinarily be on opposite sides of the fence.
Back in February, someone in USDA's Farm Service Agency inserted new language defining family farms in a proposed rule aimed at “streamlining the regulations governing the direct Farm Loan Programs,” as a Federal Register notice put it.
A family farm, it said, “generates or will generate in a typical year annual gross farm income which does not exceed the greater of $750,000 or 95 percent of the statistical distribution of the income of farms in the state with gross sales in excess of $10,000.”
The change to the current rule's broad guidelines for family farms would mean that most farms with annual gross income of more than $750,000 would no longer be eligible for direct and guaranteed Farmers Home loans.
The Feb. 9 notice did not attract much attention, but a group of farm and lender organizations, including the American Bankers Association, later sent a letter to the Farm Service Agency, protesting the provision.
“We understand USDA officials estimate 25,000 farms would no longer be eligible for FSA assistance simply due to the $750,000 cap,” the letter said. “Producers of high-value crops and livestock products (dairy, fruit, vegetables, and nursery stock among others) would be impacted more severely by the proposed definition.
“This potential exclusion flies in the face of everything our organizations have worked to accomplish in the last several decades, namely to encourage our members to produce more high value, and value-added agricultural products to be more competitive in the global economy.”
Two weeks later, staff members for Rep. Marion Berry, D-Ark., contacted this newspaper about the proposed change. Berry promised other members of Congress would protest the change.
The latter occurred May 12 when Berry, Rep. Charles Stenholm, D-Texas, and 20 other congressmen wrote Agriculture Secretary Ann M. Veneman, urging her to drop the change. Rep. Randy Neugebauer of Texas and several other Republicans signed the letter.
“We encouraged USDA to go back to the drawing board and come up with a different way to determine what constitutes a family farm,” said Stenholm, who is running for Neugebauer's seat in Texas' 19th District. “We expressed our concerns that the use of income figures is not the best method for agriculture when farm and ranch income can vary so greatly from year-to-year.”
The letter encouraged FSA to rethink the other change in the family farm definition, which would make only parent/child, sibling or husband/wife relationships eligible, meaning that a grandchild who wanted to join an operation with a grandparent would not be eligible to borrow money to finance that operation.
As stated earlier, no one has come forward to claim ownership of the rule change. But his action serves to remind that efforts to take commercial agriculture back to the horse and mule days can come from any quarter at any time.
e-mail: [email protected]