[Senate Hearing 119-31]
[From the U.S. Government Publishing Office]
S. Hrg. 119-31
PERSPECTIVES FROM THE FIELD:
RISK MANAGEMENT, CREDIT, AND RURAL
BUSINESS VIEWS ON THE AGRICULTURAL
ECONOMY, PART 3
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HEARING
BEFORE THE
COMMITTEE ON AGRICULTURE,
NUTRITION, AND FORESTRY
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
March 11, 2025
__________
Printed for the use of the
Committee on Agriculture, Nutrition, and Forestry
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available on http://www.govinfo.gov/
__________
U.S. GOVERNMENT PUBLISHING OFFICE
59-707 PDF WASHINGTON : 2025
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COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY
JOHN BOOZMAN, Arkansas, Chairman
MITCH McCONNELL, Kentucky AMY KLOBUCHAR, Minnesota
JOHN HOEVEN, North Dakota MICHAEL F. BENNET, Colorado
JONI ERNST, Iowa TINA SMITH, Minnesota
CINDY HYDE-SMITH, Mississippi RICHARD J. DURBIN, Illinois
ROGER MARSHALL, Kansas CORY BOOKER, New Jersey
TOMMY TUBERVILLE, Alabama BEN RAY LUJAN, New Mexico
JAMES C. JUSTICE, West Virginia RAPHAEL WARNOCK, Georgia
CHARLES GRASSLEY, Iowa PETER WELCH, Vermont
JOHN THUNE, South Dakota JOHN FETTERMAN, Pennsylvania
DEB FISCHER, Nebraska ADAM SCHIFF, California
JERRY MORAN, Kansas ELISSA SLOTKIN, Michigan
Fitzhugh Elder IV, Majority Staff Director
Caleb Crosswhite, Majority Chief Counsel
Jessica L. Williams, Chief Clerk
Lauren Santabar, Minority Staff Director
Chu-Yuan Hwang, Minority Chief Counsel
C O N T E N T S
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Tuesday, March 11, 2025
Page
Hearing:
Perspectives From the Field: Risk Management, Credit, and Rural
Business Views on the Agricultural Economy, Part 3............. 1
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STATEMENTS PRESENTED BY SENATORS
Boozman, Hon. John, U.S. Senator from the State of Arkansas...... 1
WITNESSES
Durbin, Tara, Chief Lending Officer for Agriculture, Farm Credit
Mid-America, Louisville, Kentucky.............................. 4
Hoch, Dalynn, EVP and Head of Rural Community Insurance Services,
Zurich North America, Anoka, Minnesota......................... 6
Hopkins, Caleb, Loan Production Officer, First Dakota National
Bank, Halbur, Iowa............................................. 8
Noble, Ben, Executive Vice President and Chief Operating Officer,
Riceland Foods, Stuttgart, Arkansas............................ 9
Rowe, Jr., Sedrick, Farmer/Owner, Rowe Organic Farms, Albany,
Georgia........................................................ 11
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APPENDIX
Prepared Statements:
McConnell, Hon. Mitch........................................ 34
Durbin, Tara................................................. 35
Hoch, Dalynn................................................. 41
Hopkins, Caleb............................................... 48
Noble, Ben................................................... 59
Rowe, Jr., Sedrick........................................... 64
Document(s) Submitted for the Record:
Booker, Hon. Corey:
National Young Farmers Coalition, letter for the Record...... 70
Question and Answer:
Durbin, Tara:
Written response to questions from Hon. Adam Schiff.......... 76
Hoch, Dalynn:
Written response to questions from Hon. Adam Schiff.......... 77
Noble, Ben:
Written response to questions from Hon. John Boozman......... 82
Written response to questions from Hon. Adam Schiff.......... 83
Rowe, Jr., Sedrick:
Written response to questions from Hon. Peter Welch.......... 84
Written response to questions from Hon. Adam Schiff.......... 85
PERSPECTIVES FROM THE FIELD: RISK MANAGEMENT, CREDIT, AND RURAL
BUSINESS VIEWS ON THE AGRICULTURAL ECONOMY, PART 3
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TUESDAY, MARCH 11, 2025
U.S. Senate
Committee on Agriculture, Nutrition, and Forestry
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m., in
Room 328A, Russell Senate Office Building, Hon. John Boozman,
Chairman of the Committee, presiding.
Present: Senators Boozman [presiding], McConnell, Hoeven,
Ernst, Marshall, Tuberville, Moran, Klobuchar, Bennet, Smith,
Booker, and Warnock.
STATEMENT OF HON. JOHN BOOZMAN, U.S. SENATOR FROM THE STATE OF
ARKANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION,
AND FORESTRY
Chairman Boozman. Good morning, and welcome. It is my
privilege to call this hearing to order.
We will have people kind of drift in and out. We have got a
vote going on right now, and then we have got another one that
is going to be called in a little bit, so if you are testifying
and somebody gets up and leaves, they are probably coming back.
But, as you all know, you are here at an interesting time. It
is just a busy time and a lot is going on.
Welcome. It is my privilege to call the hearing to order. I
would like to thank our witnesses today for taking time from
your families, your work responsibilities to share your
expertise with our Committee today.
As a proud Arkansan, I am delighted to have Ben Noble of
Little Rock, Arkansas, on today's panel as well.
This hearing is the third in a series which our Committee
is conducting to examine the current state of America's rural
economy from the perspective of our farmers, ranchers, lenders,
and rural leaders. Having time to reflect on what we have heard
in the previous two hearings, it is clear to me that a common
theme has emerged. If we expect current and future generations
of producers to not only survive but thrive, we need to pass a
strong five-year farm bill this year that strengthens the farm
safety net and revitalizes rural communities, many of which are
struggling to retain an adequate workforce to feed, fuel, and
clothe the next generation of Americans. More than 70 percent
of all counties in this country are rural, and agriculture is
the number one industry in a large majority of those rural
areas.
While there are numerous valuable rural development
programs in the farm bill that many of us on this Committee
champion, the most potent mechanisms for rural development are
the risk management tools that our producers utilize to secure
the financing necessary to grow and expand their operations,
which in turn support the communities they call home.
The economic activity generated by agricultural sector in
rural communities supports everything from local retail
operations that supply inputs such as feed, seed, fertilizer,
and fuel to the grain mills, cotton gins, or other processing
facilities that provide direct employment opportunities for
local residents. Local governments count on that tax base to
provide critical services and infrastructure needed to keep
communities healthy and vibrant.
Unfortunately, every Member of this Committee has heard
directly from farmers in their State about the very difficult
conditions they have endured over the past several years and
are likely to face in the future if things continue the way
that they are. While many of us have heard from ag groups for
years now about the importance of getting a farm bill signed
into law, I noticed a distinct change in tone beginning last
summer as I visited with not just producers but also their
lenders. One banker in Arkansas then estimated that producers
could struggle to secure financing for planting roughly 20
percent of the acres in my home State.
Unfortunately, tough times are nothing new for our Nation's
farmer. They have endured many challenges before, but we have
entered a scenario in which many economic indicators of the
health for the agriculture sector, especially for row crops,
are headed in the wrong direction and have been doing so for
some time now. The $10 billion in economic assistance provided
at the end of last year is a critical bridge for many farmers
to secure 2025 operating loans. I appreciate the work of many
Members of this Committee in securing this assistance and look
forward to swift implementation by Secretary Rollins and the
Department.
However necessary to ensure many farms stayed in operation
for the upcoming year, this economic assistance should not in
any way be considered a substitute for a five-year farm bill.
Whether you look at rising levels of farm debt, loan
delinquency rates, or the percent of row crop farmers that need
to refinance debt to cash-flow, it is clear that Congress needs
to act quickly to strengthen the farm bill programs. The suite
of risk management tools should provide a critical backstop for
producers and ensure adequate credit access for all generations
of farmers, but especially our young and our beginning farmers
who we are counting on to carry on the honorable work of
feeding the world.
I look forward to hearing from our witnesses here today and
putting their advice into action as we continue our work on the
farm bill this Congress.
Ranking Member Klobuchar will be joining us momentarily, so
I will now proceed with our witness introductions. Following
introductions, the Ranking Member will deliver her opening
statement.
Leading off our panel today is Mrs. Tara Durbin. Senator
McConnell was unable to be with us at this moment, but he is
very proud to have Mrs. Durbin here before the Committee today.
I am submitting Senator McConnell's remarks regarding Tara into
the record. Without objection, so ordered.
[The letter can be found on page 34 in the appendix.]
Chairman Boozman. Mrs. Durbin serves as Chief Lending
Officer for Agriculture Farm Credit Mid-America, which is
headquartered in Louisville, Kentucky. As a member of the
organization's Executive Committee, she helps to strategize
operations across Farm Credit Mid-America footprint, which
serves residents of Kentucky, Tennessee, Ohio, Indiana,
Missouri, and my home State of Arkansas. Mrs. Durbin
understands the challenges producers are facing as she works
alongside her husband and son on the farm. I look forward to
listening to your testimony, Mrs. Durbin. Thank you so much for
being here.
Mrs. Dalynn Hoch, did I get that right?
Mrs. Hoch. Close enough, Dalynn.
Chairman Boozman. Dalynn, I am sorry. I did not get it
right.
[Laughter.]
Chairman Boozman. We are very pleased to have you. Mrs.
Hoch serves as the Head of Rural Community Insurance Services.
She also serves as an executive member of the Crop Insurance
and Reinsurance Bureau, a member of the National Crop Insurance
Services Board of Directors, a member of the American
Association of Crop Insurance, and her family farms in the home
State of our Ranking Member. Mrs. Hoch brings valuable insight
to today's hearing through her leadership with RCIS and
intimate understanding of how crop insurance impacts farmers
and the communities in which they live. Mrs. Hoch, thank you so
much for being here. I look forward to your testimony.
I believe Senator Ernst is going to introduce our next
witness.
Senator Ernst. Yes. Thank you, Mr. Chair, for the
opportunity to introduce my constituent, Caleb Hopkins, who
hails from Halbur, Iowa, which is a tiny, tiny little town in
Carroll County, which is west central Iowa. If you go up
Highway 71 from my neck of the woods, you are going to end up
fairly close to where Caleb and his family live.
Mr. Hopkins is a Loan Production Officer for Dakota MAC and
serves as the Chair for the American Bankers Association's
Agriculture and Rural Lenders Committee, which he represents
here today. Mr. Hopkins received his bachelor's degree in
Agricultural Business from the greatest university in the
United States, Iowa State University--go Cyclones--and later
obtained an advanced degree from the Graduate School of Banking
in Madison, Wisconsin.
In addition to his work as a loan officer, Mr. Hopkins is
an active farmer with his wife and three children, raising
pure-bred Hereford cattle. I am a Hereford fan myself. When I
show for the Governor's charity steer auction, it is always a
Hereford, so thank you.
We are all very grateful you could make it here today, and
we look forward to your valuable testimony on how Congress can
better serve, protect, and support our ranchers, farmers, and
rural communities. Thanks for being here, Caleb. We appreciate
you. Thank you, Mr. Chair.
Chairman Boozman. Thank you. Now, it is my pleasure to
introduce to the Committee a great Arkansan from a small
community in the heart of the Delta, Mr. Ben Noble. Ben has
grown up surrounded by agriculture, has done well to serve the
industry for many years. Upon his graduation from the
University of Arkansas, Ben made his way to Washington, DC,
working as a staffer for both Senator Dale Bumpers and Senator
Blanche Lincoln of Arkansas. Blanche is up there. She is making
sure you and I behave.
[Laughter.]
Chairman Boozman. We often hear about the mass exodus from
rural America, that when young people leave, new ideas and
innovation leave with them. Ben is the exemplary example of
what can happen when those people return to their rural
communities. Ben uses his experiences to help guide new ideas
through his service at the Arkansas Hunger Relief Alliance, the
Little Rock Chamber Board of Directors, Commissioner of the
Arkansas Heritage Commission, and through his work in public
affairs.
Ben now serves as the Executive Vice President and Chief
Operating Officer for Riceland Foods based in Stuttgart,
Arkansas. Riceland is the world's largest miller and marketer
of rice, a major soybean processor in the Mid-South, and a
staple for farmers and rural communities alike. Ben, thank you
for being here, and we look forward to your testimony.
Mr. Sedrick Rowe. I am pleased to introduce Mr. Sedrick
Rowe. Sedrick is a first-generation organic peanut farmer from
Albany, Georgia. Sedrick owns and operates Rowe Organic Farms
where he grows peanuts, watermelons, sunflowers, and hemp. He
is a founding member of the Georgia Organic Peanut Association,
where he helps create markets for value-added agricultural
products and support small and medium-sized farmers in the
Southeast. He attended Fort Valley State University, where he
earned a bachelor in Plant Science with a concentration in
Horticulture, as well as a master's of Public Health with a
concentration in Environmental Health. He is currently a
candidate for a Ph.D. at Tuskegee University for Integrated
Bioscience. Sedrick, thank you so much for being here. We look
forward to your testimony.
Again, thank you all for being here. Mrs. Durbin, you are
now recognized for your statement.
STATEMENT OF TARA DURBIN, CHIEF LENDING OFFICER FOR
AGRICULTURE, FARM CREDIT MID-AMERICA, LOUISVILLE, KENTUCKY
Mrs. Durbin. Chairman Boozman, Ranking Member Klobuchar,
and Members of the Committee, thank you for inviting me to
testify here today. My name is Tara Durbin, and I am a lifelong
advocate for agriculture. My husband Dusty and I run a cash
grain operation, and for more than two decades, I have also
worked with Farm Credit Mid-America's customers in various
lending roles. Today, I serve as Farm Credit Mid-America's
Chief Lending Officer, where I oversee the agriculture lending
activities.
Farm Credit Mid-America is a customer-owned lending
cooperative and a proud part of the Farm Credit System. We
serve more than 145,000 customers in Arkansas, Indiana,
Kentucky, Missouri, Ohio, and Tennessee. Together with 55 other
Farm Credit Associations, we are committed to supporting rural
communities in agriculture with reliable, consistent credit.
Over the past several months, this Committee has heard from
producers and industry experts about the challenges emerging in
the agriculture economy. It is important for me to highlight
that we are, in fact, seeing ``a tale of two worlds'' when it
comes to the financial health of American agriculture, the
factors that most commonly determine which farm economy is
being felt include geographic region, commodity produced, farm
diversification, and financial position. I have provided more
in my written testimony, so I will just briefly describe the
financial conditions that we are seeing.
Row crop producers are facing headwinds. However, those in
corn, soybeans, and wheat have benefited from several years of
being able to build liquidity and reinforce their financial
positions. Our cotton and rice producers, particularly our
Arkansas customers, have faced multiple years of price
volatility, quality concerns, and yield challenges, leading to
more rapid liquidity erosion. The protein sector is a bit of a
bright spot as it benefits from strong demand, limited supply,
and lower feed costs.
We are committed to working with our customers as current
conditions are placing financial strain on many farmers,
regardless of age or experience in farming. Like other Farm
Credit Associations, we utilize several practices to work with
producers through challenging cycles. These include proactively
restructuring debt to support cash-flow concerns, providing
financial coaching and education, and using Federal programs
like crop insurance and the FSA Loan Guarantee program to
mitigate risk.
Before I discuss the farm bill, I would like to recognize
the importance of the assistance provided in the American
Relief Act that was enacted late last year and championed by
many on this Committee. As we look to the future, American
farmers must have certainty and predictability of a strong
five-year farm bill with additional Federal investment that
reflects today's market reality. My written testimony
identifies a detailed list of Farm Credit priorities in
supporting the next farm bill, and I would like to briefly
mention two that are particularly relevant for this hearing.
First, crop insurance is the cornerstone of the farm safety
net and one of the most important risk mitigation tools
available to our farmers. We support the strongest possible
Crop Insurance program, and we applaud the Committee for
exploring ways to enhance this vital tool to improve
affordability and coverage.
Second, the FSA Loan Guarantee program allows lenders to
make loans to farmers who may not qualify for traditional
credit. This tool is not only important for lenders when
financial conditions and agricultural economy become more
challenging, but also helpful when working with young and
beginning producers. We thank Ranking Member Klobuchar and
Senator Hoeven for their work on the PACE Act, which will
provide critical updates to the FSA Loan program by aligning
the current costs of operating a farm with the loan limits.
The future of agriculture relies on the success of our
young, beginning, and small farmers. Every Farm Credit
Association offers a uniquely tailored program designed to meet
the needs of their young, beginning, and small farmers. Farm
Credit Mid-America's program is called Growing Forward, which
provides special underwriting standards and tier 1 interest
rates, along with personal and business education programs.
These Growing Forward customers are expected to create business
plans and to work with their loan officers to receive financial
coaching and make sure they are on track to accomplish their
goals and support the operation's viability.
Growing Forward supports young producers like Jordan Brewer
from LaRue County, Kentucky. In 2021, he took over his
grandfather's cow-calf operation while balancing school and
working full-time as a nurse. With the help of Growing Forward,
State and Federal programs, and hard work, he has grown his
operation and currently runs 150-head cattle herd. Growing
Forward was a critical resource that helped Jordan access the
capital needed to secure his family farming legacy.
In conclusion, thank you very much, Chairman Boozman and
Ranking Member Klobuchar, for allowing me to testify today.
Farm Credit is committed to fulfilling our 109-year-old
mission, and we look forward to working with you as you
reauthorize the farm bill. Thank you.
[The prepared statement of Mrs. Durbin can be found on
pages 35-40 in the appendix.]
Chairman Boozman. Thank you, Mrs. Durbin. Mrs. Hoch.
STATEMENT OF DALYNN HOCH, EVP AND HEAD OF RURAL COMMUNITY
INSURANCE SERVICES, ZURICH NORTH AMERICA, ANOKA, MINNESOTA
Mrs. Hoch. Chairman Boozman, Ranking Member Klobuchar, and
other distinguished Members of this Committee, thank you for
allowing me the privilege and the opportunity to testify today
on the importance of crop insurance and the vital role that it
plays in providing risk management to farmers across the
country and facilitating capital flow to the rural American
economy. My name is Dalynn Hoch, and I am the Head of Rural
Community Insurance Services, RCIS, which operates as one of
the 12 approved insurance providers, or AIPs. RCIS delivers
crop insurance nationally, so we are proud to serve farmers in
each State represented on this Committee.
I am a proud farmer's daughter, and I now also farm with my
husband Emory and my brother Dan in the great State of
Minnesota. I learned a lot of lessons on the farm. I learned
the importance of generational values, honesty, integrity,
faith, and hard work. I also learned that sometimes we faced
terrible losses that came with large hail, flooding rains, and
weeks of drought. In 2016, I was the CFO for Zurich North
America when we acquired RCIS, and it was one of the proudest
moments in my career when I was able to call my dad and tell
him that we had just bought a crop insurance company. Now this
last year, I have had the privilege to become the head of RCIS.
This conversation today, it is personal for me, not just as
the head of an insurance provider, but as a farm owner and
operator, and perhaps most importantly, as a farm girl who saw
how crop insurance protected us, allowed us to continue to farm
when it mattered most. I do thank those of you on the Committee
and other policymakers who have worked hard to continually
improve our farmers' most important risk management tool.
Crop insurance is an economic driver in rural America. It
is critical to the flow of capital for our farmers as it
secures the operating loans they need with the banks. Imagine
if we had to pay all of our expenses at the beginning of the
year before we get a paycheck. That is exactly what our farmers
have to do every year with all of their input costs. Crop
insurance not only secures loans and protects the farmers when
they suffer a loss, it also spills over into the local economy,
empowering agriculture retailers and other local businesses
often the first line of unsecured debt to the farmer.
The last several years have seen a drastic increase in ad
hoc disaster payments to rural America. It is only prudent for
this body to be looking for ways in the next farm bill to plug
these gaps in the safety net. We ask that you consider crop
insurance as the primary tool to help fill these gaps. We
discourage the creation of any disaster program that would
disincentivize farmers from purchasing crop insurance, request
recognition that companies do incur costs for administering aid
outside the purview of the Federal Crop Insurance program, and
we would oppose the creation of any disaster package that is
funded by cuts to crop insurance.
For crop insurance to function as designed, it must be
affordable, widely available for purchase across the country,
and economically viable for the private sector to deliver and
sustain the long-term commitment of their capital, both dollars
and talent, to this great industry.
With the growth of the program has come challenges. AIP's
expenses have grown significantly as the cost to market,
service, and adjust claims have expanded, education costs are
increasing, and investments are constantly made to improve the
tools and technologies that are needed to provide exceptional
service to America's farmers. The effects of inflation have
been felt throughout our industry. The administrative and
operating payments provided by the USDA to help cover these
delivery costs have not kept pace with either inflation or the
rising price or complexity of delivering modern day crop
insurance.
The inflation factor adjustment that was built into A&O
calculations was unfortunately removed in 2015. These
shortfalls come out of insurers' income, dragging down the real
rate of return for the industry to levels that are just
marginally better than the risk-free U.S. Treasuries. We want
to see farmers and ranchers succeed, and as private businesses,
we must also earn an adequate return to ensure that our
investors keep this capital invested in the agricultural
industry long term.
Crop insurance is the premier risk management tool for the
American farmer. The public-private partnership that we enjoy
delivers it in an efficient and effective way. These crop
insurance benefits have kept families on their farms and
Americans clothed, fueled, and fed.
Thank you for inviting me to speak today and for your
continued support of the Crop Insurance program. I look forward
to answering any questions you have.
[The prepared statement of Mrs. Hoch can be found on pages
41-47 in the appendix.]
Chairman Boozman. Thank you, Mrs. Hoch. Mr. Hopkins.
STATEMENT OF CALEB HOPKINS, LOAN PRODUCTION OFFICER, FIRST
DAKOTA NATIONAL BANK, HALBUR, IOWA
Mr. Hopkins. Thank you, Chairman. Chairman Boozman, Ranking
Member Klobuchar, and the Members of the Committee, my name is
Caleb Hopkins. I am the current Chairman of the American
Bankers Association's Agricultural and Rural Bankers Committee
and testifying in that capacity today.
I have worked in agricultural banking for 13 years,
including the past two years as a Loan Production Officer for
Dakota MAC, a subsidiary of First Dakota National Bank in
Yankton, South Dakota. Before First Dakota National Bank, I
worked at a small community bank helping to lead their
agricultural lending. Agricultural bankers have a deep
appreciation for the important role producers play in our
economy and the unique challenges they face.
Like many agriculture bankers, my passion for agriculture
goes beyond the bank. I have a herd of cattle, I am a proud 4-H
dad, and I have a crop insurance business with my wife. Our
passion for the next generation of producers goes beyond a
program or clinic. Fostering the next generation of producers
is what we do every day. I appreciate the opportunity to
present the views of the bankers at this hearing.
Banks continue to be one of the first places that farmers
and ranchers use when looking for agricultural loans, and over
80 percent of the banks in the United States have agriculture
in their portfolio. Bankers finance all types of agriculture in
every part of the country. Agricultural lending is a good
business, and we work with our customers to improve their
business, both in the short and long term.
I would like to start today by highlighting the current
state of the agricultural economy. I was personally involved in
congressional meetings to get economic assistance for farmers
and ranchers. The economic assistance that was passed by
Congress will provide some relief to our customers, but it
still will not be enough for many. For example, soybean acres
are expected to have a payment of $30 per acre, but estimates
in my area show farmers being short $300 per acre on soybean
ground. This is a trend across most commodities.
USDA has projected an increase in farm income of 29 percent
due to economic assistance, but input prices are still high due
to inflation. At the same time, commodity prices are expected
to drop this year. Every region will be affected differently,
but it is becoming increasingly apparent that economic
assistance will not be enough to cover the shortfalls this year
or enhance the long-term health of balance sheets to weather
another economically challenging year.
This is why bankers are so supportive of a long-term farm
bill. Our customers need the certainty that comes with a farm
bill, and lenders must operate on knowns, not projections. A
long-term farm bill provides certainty to agriculture, which
allows for long-term planning. We look forward to working with
the Senate Agriculture Committee to develop a new farm bill.
ABA does have a list of priorities that bankers would like
to see in the next farm bill that I have highlighted in my
written testimony. This includes increasing FSA Guaranteed and
Direct Loan programs. We thank Senators Hoeven and Klobuchar
for the PACE Act that creates a model for how this can be
achieved. Additionally, changes to eligibility for beginning
farmers and ranchers is vital to bringing in the next
generation of farmers and ranchers. Bankers are supportive of
modernizing reference prices and protecting and enhancing crop,
livestock, and dairy insurance programs. Last, Farmer Mac is a
tremendous partner to the banking industry, and we support
efforts to modernize Farmer Mac to meet the modern needs of
American agriculture.
Beyond the farm bill, ABA is looking forward to the tax
reform process that is playing out in Congress. Our customers
rely on keeping the current estate tax exemptions and capital
gain exemptions. The Access to Credit for our Rural Economy
Act, better known as the ACRE Act, is tax legislation that
would create a level playing field for all lenders in
agriculture. ABA analysis has shown that the ACRE Act would
reduce the effective interest rate by up to one percent for
qualified borrowers. We thank Senators Moran, King, Tuberville,
Gallego, Marshall, and Cramer for sponsoring this vital piece
of legislation. The ACRE Act will increase credit availability
to rural America while driving down the cost for our borrowers.
We believe this is the right solution to help rural America
during these tough economic times, as well as in the long term.
Farm banks are healthy and continue to be forward-looking,
growing capital and increasing reserves. Bankers are proud of
the work we do to support our Nation's farmers and ranchers.
The agriculture economy is a critical part of our economy, and
America's banks remain committed to serve it through good times
and bad.
Thank you. I would be happy to answer any questions you may
have.
[The prepared statement of Mr. Hopkins can be found on
pages 48-58 in the appendix.]
Chairman Boozman. Thank you. Mr. Noble.
STATEMENT OF BEN NOBLE, EXECUTIVE VICE PRESIDENT AND CHIEF
OPERATING OFFICER, RICELAND FOODS, STUTTGART, ARKANSAS
Mr. Noble. Good afternoon, Chairman Boozman, Ranking Member
Klobuchar, and Members of this Committee. It is truly an honor
to be before you today.
As Senator Boozman shared earlier, many years ago, I sat as
a staffer in this very room to then-Senator Blanche Lincoln of
Arkansas. She eventually served as Chairman of this Committee,
and it brings back a lot of memories seeing her portrait here
on the wall today. Nearly 30 years later, our own John Boozman
now holds that gavel, and I cannot think of a better man to
lead this Committee, so forgive me for just taking a moment
here, but this is truly a special moment for a boy from
Arkansas.
I am Ben Noble, Executive Vice President and Chief
Operating Officer of Riceland Foods, but I am also the son of
Buddy Noble and the brother of Andy Noble, who own and manage
Noble Farms. As we discuss the state of the farm economy today,
my story unfortunately mirrors what is happening across the
countryside in rural America. Due to high input cost and lack
of profitability over a multi-year period and the low
probability for profitable returns this year, my family is
pulling the ripcord. 2025 will be the first year since 1890--
that is 135 years--that a Noble has not actively farmed in east
Arkansas. We are selling our equipment at an auction this
Friday.
Our experience is unfortunately not unique, as lenders and
farmers across the Mid-South face tough decisions with the
prospect of low commodity prices, high input costs, and extreme
uncertainty and volatility. This situation has profound and
far-reaching effects across the economy and the livelihood of
rural America.
Riceland Foods is a farmer-owned cooperative that has been
in business since 1921. We are the largest miller and marketer
of rice in the United States, and we also serve as the largest
marketer of soybeans in the Mid-South. Our membership consists
of 5,500 members across America, and our farmer patrons are
concentrated in Arkansas and Missouri. We directly employ over
1,700 people and indirectly support hundreds of jobs in rural
America.
For decades, our business model has been to provide
marketing options for our members' rice and soybeans, process
the grain, and then sell and distribute the finished goods
through domestic and international channels. This activity
generates well over $1 billion annually and is turned over
multiple times in our region of the Mississippi Delta.
The key in the aforementioned business model is the ability
of the farmer to secure financing and produce a crop on an
annual basis. Also key in this equation is a strong economy
that allows farmers to remain profitable. Without our farmer
members, all the economic activity that Riceland Foods
generates and the jobs we support disappear, leaving economic
deserts in many areas of east Arkansas and the Bootheel of
Missouri.
Financial institutions work diligently and creatively to
keep farmers on the farm this growing season, but a shadow of
uncertainty remains across the entire system. Planting
decisions and seed purchases are often made months before now.
As final assessments are made, productive farmland will likely
remain fallow this year due to some farmers' inability to
attain financing. Ultimately, this could reduce the production
of rice, soybeans, corn, and possibly other commodities in our
growing region. Businesses like ours are struggling to plan
accordingly to receive and process this year's crop.
Our company has four million locations across Arkansas and
Missouri. We also have 24 drying locations across the same
footprint. In small rural towns like Stuttgart, Hazen, Poplar
Bluff, New Madrid, Wheatley, and many, many more, Riceland
Foods is the largest employer and the main driver of the local
economy. When our farmers suffer, we suffer. Ultimately, this
impacts the entire region. It is not overstating to say that if
Riceland Foods does not operate in many of these small towns,
the towns no longer exist.
We must take serious and substantial action that results in
updated reference prices that secure a strong safety net for
rice farmers. This means a substantial increase in the PLC
reference price and the assurance that payment limitations are
increased to reflect modern day farming. These enhancements
must be effective for the 2025 crop year. Securing a strong
safety net for our growing members also provides stability for
both farmer-owned cooperatives and private mills.
Along those same lines, I would be remiss if I did not
mention the importance of tax policy on our cooperative. Of
particular significance to cooperatives such as Riceland, the
section 199A deduction stands out as one of our farmer members
most crucial tax policies. This provision enables cooperative
to pass tax deductions directly through their members, who then
reinvest the funds back into their operations. These
reinvestments, in turn, strengthen local economies by creating
jobs, increasing spending on agriculture production, and
fostering growth in rural communities.
I will finish where I began in this full-circle moment for
me. I have witnessed firsthand the work Congress can do to
support American agriculture as both a Senate staffer and a
professional in this industry working on behalf of farmers. Now
is the time for Congress to act on a new farm bill and support
the industry I devoted my life to before it is too late.
Unfortunately, there are many farmers out there who will not be
farming this year, and the outlook is even more grim. I implore
you to act. Keep farmers farming. Every American is relying on
this Committee and your colleagues in Congress to deliver.
Thank you for the opportunity, and I look forward to
answering any questions.
[The prepared statement of Mr. Noble can be found on pages
59-63 in the appendix.]
Chairman Boozman. Thank you, Mr. Noble, and thank you for
sharing your story. Your family has been a powerful force for
agriculture since 1890 and are so well respected, but I think
it really highlights how difficult it is right now, and the
importance of the hearing today and the importance of getting a
five-year farm bill done. I know your ancestor of 1890 is very,
very proud of you right now.
Now, we would like to hear from Mr. Rowe.
STATEMENT OF SEDRICK ROWE JR., FARMER/OWNER, ROWE ORGANIC
FARMS, ALBANY, GEORGIA
Mr. Rowe. Mr. Chairman, Ranking Member, and Members of the
Committee, thank you for the opportunity to be here today. My
name is Sedrick Rowe. I am a young, first-generation farmer
from Albany, Georgia. I own and operate a 30-acre farm where I
grow organic hemp, peanuts, sunflowers, and watermelons. Today,
I am going to talk to you on some highlights of my farming
experience and talk about access to credit and risk management
resources.
I am concerned that without a new farm bill, the safety net
would continue to be largely out of reach for us. This
Committee has the opportunity to promote effective policy to
help new farmers enter and stay into the agriculture
generation. I did not inherit land. I had to build it from the
ground up. Without FSA, I was not able to purchase my first
land.
At the same time, I have also had some frustrations with
FSA. For example, I was denied a microloan early on, even
though my business plan was clearly sound. FSA is the go-to
agency for farmers who cannot find credit from other means.
Recently, they have been making some improvements. For example,
recent critical updates from the FSA Loan program include
prioritizing financial stability, offering more flexible terms,
emphasizing savings and reserve payment scheduling, avoiding
necessary impacts from balloon payments, and appropriate
collateral requirements to reduce borrower risk without
increasing the risk of the agency. We need to ensure
appropriate staff levels are there too. It is important that
someone is there to answer the phone at FSA and also other USDA
offices.
Looking to the farm bill, last year, versions include
proposals to improve beginning farmers' access to credit. The
next farm bill should include provisions that would increase
microloan limits to $100,000; match loan limits across
programs, including direct farm ownership down payment loan
programs; remove the seven-year limit on eligibility for
operation loans; support distressed borrowers; a pilot program
preapproved for direct farm ownership loans; and also pilot
loan programs to help with startup costs.
Credit is only part of the picture. Farming is a risk, and
we all know, sometimes, no matter how much you prepare, there
is still uncertainty. The Risk Management Agency and FSA offer
important risk management programs and financial relief to
farmers and ranchers exposed to loss from events such as
drought, hail, floods, and also diseases. These farm safety
nets must be strengthened and support young farmers. Also, high
value organic crops are often undervalued by insurance
coverage. For me and many other farmers, RMA does not offer
insurance products that cover what we are growing on a small
scale.
Whole-Farm Revenue Protection is the only insurance program
that is designated for small farmers and diverse farms. Only 10
whole farm policies were sold in Georgia last year. Eighty-
three percent of the farmers in Georgia do not have crop
insurance. I encourage this Committee to incentivize insurance
agencies to sell crop insurance to small-scale and specialty
crop farms like me. I also encourage this Committee to consider
new insurance products specifically designated to deal with
weather impact.
For farmers who cannot access RMA programs, the FSA offers
noninsurance crop disaster programs. This is an important
program. This program needs to continue in the support by young
farmers. By creating a revenue-based option with NAP, similar
to the Whole-Farm Revenue Protection, the agency could offer an
onramp to help farmers transition from NAP to whole farm
revenue protections once they have acquired operational
history. Getting more farmers enrolled in NAP early on is the
goal, and keep supporting them with the basic safety net. It
also gets them in the door with USDA when it comes to loan
access.
What I really want to emphasize today is that, as a young
farmer, we need to be heard. We need to know that our
experience is being considered when it comes to the farm bill
being put together. We need certainty. We need certainty that
Congress will fulfill the responsibility and deliver an
effective farm bill for all farmers. We also need certainty
that the USDA will continue to support farmers moving forward
from surviving to thriving farms. It should not be so difficult
for young and beginning farmers as myself to secure support. We
need to innovate and achieve long-term success.
Thank you again for the opportunity to testify for this
Committee. I look forward to answering any questions you may
have.
[The prepared statement of Mr. Rowe can be found on pages
64-67 in the appendix.]
Chairman Boozman. Thank you, Mr. Rowe, very much.
I am going to get into line later on, so we are going to go
right to you, Mitch. I know you have got lots of stuff going
on. You are an important guy. As I was explaining to them
earlier, there is just a whole lot of stuff going on, so you
are welcome to go ahead and question the witnesses.
Senator McConnell. Thank you, Mr. Chairman.
I want to thank Tara Durbin from my hometown of Louisville,
Kentucky, and Farm Credit, and the other witnesses for being
here.
I have been on this Committee my entire time in the Senate.
It is important to Kentucky. We have 70,000 farms, most of them
small. Small farms in particular make up the backbone of
agriculture in my State and many others.
As my colleagues on the Committee know well, farmers face a
whole lot of uncertainty in today's economy. Unstable markets,
volatile prices, record drops in farm income have made this
job, which was already difficult, even harder. Kentucky farmers
and farmers across the country are grappling with a steady
decline in farmland itself. It is more important than ever that
we ensure our farmland remains farmland, while providing
opportunity for new farmers to get involved in the agricultural
economy.
I was pleased to work with the Kentucky Farm Bureau on
legislation that would offer retiring farmers a viable path to
transition their farmland to the next generation of farmers.
Protecting American Farmers Act would reduce the tax burden on
selling farmland and encourage landholders to keep their
farmland in the hands of active, young farmers.
Tara, what financial tools would help address the problem
of land and capital access that American farmers face?
Mrs. Durbin. Thank you, Senator, for your question. As you
mentioned, that is a very complex issue. As you mentioned, you
know, a lot of communities in Kentucky specifically are kind of
wrestling with trying to solve for that. That is something that
at Farm Credit Mid-America we have witnessed across our service
territory. I, you know, personally want to share I have
witnessed that, myself and my husband. About 20 miles from our
home farm, a microchip plant has come in, and so that has
driven up the cost of land. Your question and that complex
issue hits very close to home to me as well.
You know, I would challenge you to consider looking for
ways that we can incentivize farmland to stay in agriculture
production. You mentioned our young, beginning farmers. You
know, that incentive would really help our young, beginning
farmers, as far as getting into agriculture. The barriers to
entry into agriculture, as Sedrick mentioned, are huge when we
think about land. Looking for ways to incentivize keeping
agriculture in production is definitely a way that we could
work together to solve that complex issue.
Senator McConnell. I assume Congress must have some role in
all of this. Does it require changing the law to try to get the
outcome that we prefer?
Mrs. Durbin. That would be a question that I guess we would
have to work on. As I said, that is a complex issue, and that
would take a lot of work from you all pulling together and
working with industry partners as well, as you said you had
worked with Kentucky Farm Bureau and some others to help
resolve that issue.
Senator McConnell. Okay. Thank you. Thank you, Mr.
Chairman.
Mrs. Durbin. Thank you.
Chairman Boozman. Thank you, Senator McConnell. Senator
Hoeven.
Senator Ernst. Thanks to Senator Hoeven for allowing me to
hop ahead.
Thank you, Chairman Boozman, and to our panel of witnesses
for being here today, we really do appreciate it, and would
like to start with crop insurance. Mrs. Hoch and Mr. Hopkins,
crop insurance is the most effective and reliable risk
management tool available to farmers that must remain
affordable and accessible. Over the years, Congress has
approved multiple rounds of ad hoc disaster payments to help
farmers recover from severe weather events. We see these
frequently in Iowa and, most recently, last December. I am
thankful Secretary Rollins is moving quickly to disburse to
these hurting farmers.
While these payments offer relief in times of crisis, they
are slow, they are unpredictable, and subject to political
gridlock, leaving farmers uncertain about when or if help will
actually arrive. Iowa farmers who have faced multiple natural
disasters in recent years have made it clear that they need
certainty and protection in real time, not months or years
after the damage is done.
Mrs. Hoch, can you explain why Federal crop insurance is
superior to the ad hoc disaster payments? Second, do you see
any improvements that Congress needs to make in the next farm
bill?
Mrs. Hoch. Thank you very much for the question. I made
some comments on that in my opening remarks. The disaster
payments that have been made in recent years have been
significant, and there is true opportunity to look at crop
insurance. A number of those have been already developed,
right? Could be the products, the indexed products that were
made available in the Southern part of the country. There are
area-based plans that can additionally help a farmer to have
additional cover beyond their immediate cover. These are
important steps that we can take. We can work together through
508(h) products, which allow that opportunity for new products
to be brought forward and developed, that we can work
creatively together to ensure that we bring what was more
timely and targeted than ad hoc and, as my dad always told me,
hope is not a plan----
Senator Ernst. Yes.
Mrs. Hoch [continuing]. and ad hoc disaster can be hope-
based, and that is why that certainty that your farmers say in
Iowa--it is the same in Minnesota--that certainty is so
critical. It is also critical to my banking colleagues as well.
The ability to work creatively together to find ways to move
those disaster payments into crop insurance where there is a
risk sharing. The farmer takes the risk, the government takes
risk, and as insurance providers, we also take risk. That
together creates a very effective and efficient process with
competition to bring the best results to our farmers.
Senator Ernst. Very good. Hope is not a plan. Okay.
Mr. Hopkins, can you expand on this a little bit and help
us understand why crop insurance is a necessary tool for
farmers to have when you are making loans to those farmers?
Mr. Hopkins. Thank you, Senator. I appreciate the
opportunity to discuss this. Yes, crop insurance is the number
one risk management tool in the belt for agriculture lenders.
It is a tool that also puts the power back in the producers'
hands. They have the opportunity to look at different coverage
levels and make those decisions about their operation, not only
on the risk management side, it also creates marketing
opportunities for producers when it comes to marketing those
crops proactively throughout the year. That level of certainty
helps bankers make that decision as we look at renewing
operating lines. Reference prices combined with crop insurance
are the two most important tools that bankers have.
Senator Ernst. Wonderful. Thank you, Mr. Chair. I am going
to yield back.
Chairman Boozman. Senator Smith.
Senator Smith. Mr. Chair, since I just got here, I will
defer to Senator Tuberville if he has not asked questions, and
then I will be ready to go. Thank you.
Chairman Boozman. No, that is fine. Senator Tuberville.
Senator Tuberville. Well, thank you very much.
Welcome. Glad you are here. Unfortunately, we have been
hearing some very bad news. Mr. Noble, I have got friends in
Arkansas, you know. I am hearing from them quite often. Our
agriculture economy is a disaster right now, and we have
obviously failed in some degree. I do not know where it has
failed, but it is obviously in a tailspin, and we need to help.
Mr. Noble, what can we do to help? I mean, you are seeing
all this going on firsthand. What can we do to help?
Mr. Noble. Yes, the main thing, Senator, is quick action on
a farm bill. I mean, obviously, that is easy to say and hard to
accomplish, but I think everybody up here has said something
along the similar lines, that long-term policy matters, and it
matters to agriculture lenders. It matters to the farmers that
are the recipients of the loans, but there has got to be some
certainty.
At the risk of spinning off into another aspect, we face
intense international competition with the commodities that our
company trades in. We have always been free traders, but quite
frankly, trade has got to be fair, and it has not been. There
is a lot of challenges and complexities to that. If we are
going to ask our domestic producers to compete in a worldwide
market, there has got to be stability there, and there has got
to be certainty. The quicker you all can provide that, the
better.
Senator Tuberville. Yes, thank you. I am hoping President
Trump is right on the situation right now with tariffs.
Obviously, it is our last chance to do something to help this
country, especially our farmers and producers.
Mrs. Durbin, I have been talking about the need to raise
FSA guaranteed loan limits for some time. I was pleased
Chairman Boozman included this in his framework. Can you
discuss the importance of raising guaranteed ownership loans to
$3.5 million?
Mrs. Durbin. Yes, so thank you, Senator, for that question.
At Farm Credit, we utilize the FSA Guaranteed Loan program as
an important tool for serving our customers. Specifically our
young, beginning, and small customers, that tool is extremely
important. That would allow us to loan to more customers, to
more farmers, and help them get their operations up and going,
but also as a risk-mitigating tool for us to better serve
agriculture.
Senator Tuberville. Thank you. Mr. Hopkins, we are trying
to save not just the farmers that have been doing it for a long
time, like Mr. Noble, but we are trying to get young farmers
involved in this fiasco as we are looking at that. Why in the
world you do it, I do not know, but hopefully, there are a lot
of people out there that want to get into farming. I know at
Auburn, you know, we have an agriculture department that is
very strong, and you see a lot of great activity. How do we do
that? How do we get young people involved? We lost 150,000
farms in the last four years, a disaster that nobody is talking
about.
Mr. Hopkins. Definitely. Thank you for the question,
Senator. We start with the farm bill with increasing lending
limits. As much negativity as we see surrounding agriculture, I
am very optimistic when I look at young producers we have
around our area that are very on top of management. They are
very on top of technology. They are looking for opportunity.
The question is how do we give them the opportunity? What tools
do we have to provide them with opportunity as capital expenses
are getting to be so high that the barrier to entry into
agriculture, like you said yourself, why would you want to do
it? But there are still individuals with that passion to be
producers for this country.
Senator Tuberville. Yes.
Mr. Hopkins. Raising those lending limits in order to keep
pace with that increased capital requirement allows us to
provide that capital to those producers.
Senator Tuberville. One point five million dollars for a
cotton picker, man, we have lost it, you know?
Mr. Rowe, Tuskegee, Alabama, glad to see somebody from my
home State and close to my hometown, and I know you are an
Auburn fan, right?
Mr. Rowe. Yes, sir.
Senator Tuberville. Yes, good.
[Laughter.]
Senator Tuberville. Good answer. Good answer. Hey, being a
peanut farmer, tell us how peanuts have weathered this storm
because peanut prices have been pretty good over the last few
years. What do you see for the future of peanuts?
Mr. Rowe. Thank you for the question, Senator. Personally,
my opinion when it comes to the peanut industry, it is growing
strong. Peanuts are a legume that grows on the ground, so a lot
of weather impact does not affect the peanut itself during the
growing season.
What I can say is that it is challenging with tariffs being
raised, prices go up for growers, and access to land is very
critical to stay surviving with rising tariffs. In order for
farmers to survive, they have to plant more acreage, and that
can be a challenge itself.
Senator Tuberville. Thank you. Thank you. Thank you, Mr.
Chairman.
Chairman Boozman. Thank you. Mr. Noble, I truly believe
there is no greater tool for rural development in many
agriculture communities than strong risk management tools.
Riceland is an anchor of the community in eastern Arkansas. Can
you illustrate for the Committee the impact a strong farm
safety net has on rural communities?
Mr. Noble. Sure, Senator. You know, when you think about
the support we are talking about with the safety net for
farmers, it sometimes gets lost. That is just a transaction
with the government and the farmer. I guess in one sense it is.
But when you think about how many times that dollar turns over
economically in a rural community, whether it is the grocery
store, rural health facilities, machinery repairs, countless of
other small businesses, rural America ultimately depends on the
farmer as the backbone and really the heart of their entire
community.
I think I shared earlier, for businesses such as ours, when
you go to many of these small towns, we are the largest
employer, if--I do not want to say the only--but we are a
significant player in some of these really small towns. Without
a significant safety net, I kind of shudder to think what is
going to happen to some of those areas.
Chairman Boozman. Mrs. Hoch, do you want to add to that?
Mrs. Hoch. I think the importance of crop insurance comes
into play here as well, the ability of the Committee to
continue to deepen coverage levels and the premium support for
our farmers through the work that you have done in such areas
as area plans. I will give you a personal example. When you are
facing extremely high input costs, the importance of being able
to secure that loan, of being able to have a sense of certainty
around the growth of your crop can actually be covered in the
event of a loss. Today, that coverage for soybeans would not be
adequate, and just even the highest level, which is what my
family takes of the MPCI coverage. The ability to layer on, for
instance, the ECO plan that is out there so that it provides an
additional cover from an area perspective, it allows you to
increase that coverage level in the event that there is a loss.
However, I would make two really critical points around
this. The first one is that it is really important with these
area plans that a farmer is well educated by their agent and
their provider, that it does not supplant their individual
coverage for their farm. They still need to maintain that
individual coverage and then could layer on additional area
coverage to give them more cover in the event of a loss.
It is also important that these products, as they continue
to be developed, I think they are an important tool for our
farmers of all sizes. As they are developed, it is very
important that they remain actuarially sound.
Chairman Boozman. Very good.
Mr. Hopkins, last summer, lenders like yourself started
sounding the alarm bells that getting financing might be
difficult heading into 2025. Can you give us very quickly just,
you know, something in regard to where we are at with credit
availability in light of the current farm balance sheet?
Mr. Hopkins. Thank you for the question, Senator. Yes,
sitting on American Bankers Agriculture Committee, I get the
opportunity to speak with bankers across the country. It
started in your area, in Arkansas and the Southeast, and it is
kind of starting to move its way up through the Midwest across
the country. What we are seeing is continued significant earned
net worth losses across the board. Talking to lenders down in
that area and as well as what I am seeing in the Midwest is
certain parts of the Southeast part of the country are on year
two, three, if not four of losses, and bankers are starting to
have to work at workout plans, have uncomfortable conversations
on what is the end game here?
When I look at the Midwest coming through renewal season,
we are able to get all of our renewals completed this year, but
those conversations are, what is the burn rate of working
capital? It is creeping up on us much faster. When I was here
last summer, I was hearing that from across the country, and it
is hitting home right now.
Chairman Boozman. Okay. Very good. Senator Smith.
Senator Smith. Thank you, Mr. Chair. Welcome to our
panelists. I want to say a particular hello to Mrs. Hoch, my
fellow Minnesotan. It is great to have you on the panel today.
Mrs. Hoch. Thank you very much.
Senator Smith. I want to start out by touching on something
that Senator Tuberville was touching on, which is the
challenges facing folks that are just getting into farming. We
know that the average age of farmers is creeping up, just like
my age is creeping up. As we see this big generational
transition in agriculture, we know that it is harder and harder
for beginning farmers to put the tools together to be able to
get going, whether it is access to capital or to land or to
farm safety net programs, right, and markets. Without support,
what I am very concerned about is that we will not see the
transfer of land from one generation to the next, to new
producers who maybe do not come from the farm themselves or do
not have access to land through their families and what
happens.
In Minnesota, what happens in that situation? In Minnesota,
we have developed a beginning farmer tax credit that has been a
really successful tool for young farmers as they try to get
their businesses going. I know that other States like Iowa and
Kentucky and Nebraska have also developed similar beginning
farmer tax credit programs. What this does is it provides a tax
credit to incentivize the sale or rent of farmland to beginning
farmers, and I am working on making this a national program.
I am just going to address this question to the whole panel
as a start. What do you see as the biggest hurdles facing folks
as they are going to get into farming? What do you think we
ought to be most focused on in Congress as we think about this
big farm bill that hopefully will get moving?
Mrs. Durbin. Thank you for the question, Senator. One of
the things that you have mentioned was the barrier to entry for
our young farmers, and that is true. Land access continues to
be a challenge for our young farmers. You also were inquiring
about what lenders are doing to encourage young farmers to
engage into agriculture production. The Farm Credit System, all
Farm Credit Associations have a young, beginning, small farmer
program.
Senator Smith. Yes.
Mrs. Durbin. Our young, beginning, Small Farmer program at
Farm Credit Mid-America is called Growing Forward. Within that
program, we have different underwriting standards for the
young, beginning, and small farmers. For example, somebody that
is starting out and getting into the agriculture industry is
not expected to chin the bar maybe in their early 20's at maybe
where their parents or grandparents would when we think about
loan underwriting standards. We have different loan
underwriting standards.
Specifically for those customers, they will get our tier 1
best interest rate. That is important to them. Now, that comes
with a little caveat, and that caveat is, they go through
educational programming, and we provide that educational
programming to them. We require that----
Senator Smith. Yes.
Mrs. Durbin [continuing]. they put a business plan together
to ensure that that operation----
Senator Smith. There is some technical assistance and other
kind of support that goes along with that, yes, absolutely.
Mrs. Durbin. Absolutely. Mr. Rowe, I am sorry to--I want to
make sure I have a chance to talk with Mr. Rowe about this. We
know from surveys from the National Young Farmers Coalition and
the National Farm Bureau that getting access to land, high-
quality land, is one of the biggest barriers, and we know also
that the average farm real estate value has increased, you
know, pretty dramatically. Can you talk a bit about how you see
this and what are the impacts of rising land prices on your
business and others that are wanting to get into farming?
Mr. Rowe. Thank you for your question, Senator. As you
know, like I say, land access is always a challenge for young
farmers or farmers in general. Me, personally, you know, to
speak on that, I would say the challenge also is that young
farmers come from an educational background, so they are going
to school for research and be innovative----
Senator Smith. Yes.
Mr. Rowe [continuing]. on the farm. That carries over when
it is time to go get a loan. That is a challenge right there, a
barrier by young farmers pursuing their education to better,
you know, come up with different ways to grow a crop or grow it
in a particular different environment. The challenges would be,
you know, just having more access to opportunities for young
farmers to be able to startup the farm, not based on the
history of education.
Also, I want to thank you for your leadership on this
issue, and I encourage this Committee to support establishing a
pilot program to invest in local-led projects to tackle
challenges in accessing land, credit, and markets.
Senator Smith. Thank you. Thank you very much.
Senator Klobuchar [presiding]. All right. Senator Booker.
Senator Booker. Thank you, and thank you for your
generosity as well to the Ranking Member for allowing me to get
my questions in.
At the last full hearing, we talked about the crisis,
really the threat from the illegal freeze of funding that is
imposed by the USDA on thousands of signed contracts with our
American farmers. Two weeks have gone by, and I am getting
continued frantic calls and emails from farmers, not just in
New Jersey, but across the country, who invested money into
their farms according to the terms of signed contracts with the
USDA but who are still not receiving their reimbursement
payments from the USDA.
Planting season is now here, and many of these farmers
simply do not have the resources to get their crops in the
ground and the absence of the funding that is owed to them,
again, by the USDA. It is not just the signed contracts with
the farmers, but it is also the continuing freeze of
reimbursements to nonprofits and small businesses that provide
assistance to those farmers. These nonprofits and small
businesses in New Jersey and around the country are now being
forced to lay off staff and stop helping farmers that are in
need. To make matters worse, the USDA now plans to close local
offices around the country that farmers rely on.
I have a letter dated March 10 from the National Young
Farmers Coalition focused on the USDA funding freeze that I
would request consent to have placed into the record.
Senator Klobuchar. It will be on the record.
[The letter can be found on pages 70-73 in the appendix.]
Senator Booker. I will not read the whole letter,
obviously, but I think it is really important that we highlight
the main message. They write, ``The abrupt freeze of the USDA
grant funding has left young farmers nationwide in financial
distress. Congress must act swiftly to unfreeze these funds and
ensure that young farmers can access land, capital, and
markets.'' To address this, I plan to file an amendment to the
continuing resolution this week to lift the USDA freeze on
signed contracts and to require USDA to make all past due
payments. I am hoping others on the Committee will join me.
I have a question, Mr. Rowe. Could you just for a moment
talk about the impact you are seeing from the USDA funding
freeze on the young farmers you know and work with?
Mr. Rowe. Thank you for your question, Senator. The impact
has, you know, been found, you know, that is going on in my
area, not only me, but young farmers, is with the freezing,
uncertainty is bad for farmers. It is bad for business. Not
only that, but we do not have anyone to talk to when you go to
these local FSA offices or USDA offices. Having someone in the
office or boots on the ground is affecting us when it comes to,
you know, managing different practices that we are doing on our
farm. Also, contracts with other USDA agencies are on pause,
and that means a lot of farmers will have to cancel their plans
for that year, or if they were growing a particular crop based
on that contract, it is a pause.
With the funding freeze, a lot of opportunities that
farmers have, like myself, to go out and get grant money to be
able to make my operation more thriving is not there anymore.
Senator Booker. On farmers who are often struggling
financially to make it all work, what does this mean to the
financial well-being and stability of a lot of the farmers you
know?
Mr. Rowe. They either have to not farm this year or cut
back. But, like I say, it is a challenge itself when you do not
have the support of the Federal Government.
Senator Booker. Mr. Rowe, in your testimony, you mentioned
that 83 percent of farmers in Georgia do not have crop
insurance, 83 percent uncovered. This is really a striking
failure of our safety net. As you mentioned, many of these
farmers have never had the option to purchase crop insurance
because it is difficult to find agents that are willing to work
with small farmers. I am seeing similar things in my State. Can
you speak to the importance of Congress making changes in the
upcoming farm bill to ensure that crop insurance agents are
incentivized to sell crop insurance to small farms like yours?
Mr. Rowe. Thank you for your question, Senator. I just
encourage the Committee to, like I say, incentivize crop
insurance agencies to sell crop insurance to small-scale
farmers like myself and also specialty crops because, right
now, it is a waste of their time dealing with a small farmer
like myself. Large crop insurance does not particularly focus
on young farmers because they do not have any type of risk
management there themselves.
Senator Booker. That is really enlightening. Thank you very
much.
In the 10 seconds I have left--and I remind you, this is
for the permanent Senate record--I and you both played college
ball. My press guide listed me as 68", 270. Was your press
guide equally as inaccurate in listing your height and weight?
Mr. Rowe. Yes, sir, he was.
Senator Booker. Okay.
[Laughter.]
Senator Booker. Thank you very much.
Senator Klobuchar. Okay. Very good. I am not going to ask
anyone else their weight. I just want to be clear.
[Laughter.]
Senator Klobuchar. Okay. Thank you, Senator Booker. I
apologize. We had a long leadership meeting, as you can
imagine. Both Senator Booker and I were there. There are just a
few things going on right now that it is in everyone's interest
that we resolve.
I want to thank--I know you were introduced, Mrs. Hoch from
Minnesota, from Anoka, Minnesota. Thank you. I am sure you
survived without me introducing you. I heard you did a good
job, so thank you for that.
Mrs. Hoch. Thank you.
Senator Klobuchar. We all know that our farmers are in a
challenging environment right now. That obviously includes
tariffs, something that is whiplashing farmers back and forth.
You know, then they are on, then it is paused, then they are
doubled, as happened today. That is not certainty, it is chaos,
and our farmers are among those that are hit the hardest.
On top of that is input costs, and I am very concerned
about what is happening right now as already a difficult time.
One of the ways we can give you that certainty is by making
sure you have access to affordable and reliable credit. That
can mean the difference--I know you all know better than me--
between economic viability and foreclosure. Farmers rely on
USDA, commercial banks, and our Farm Credit System.
Senator Hoeven and I have worked together to expand credit
opportunities and improve our farm loan programs. I have heard
many of the Members mention this. This is the bill that Senator
Hoeven and I have, and I am very much looking forward to
working with the Chairman as we work on a farm bill to
increasing those loan limits and improving access to credit.
The bill also includes new authority to allow farmers who fall
into distress to refinance USDA guaranteed loans into direct
loans.
In addition to credit access, our farmers need strong and
reliable crop insurance, and we all know that since the 2018
Farm Bill, more farmers have been able to purchase crop
insurance, but there are still gaps in risk management options
and access for farmers. Many small, diversified producers face
challenges with buying crop insurance policies, particularly
cost. That is why Majority Leader Thune, who remained on this
Committee--I do not know where his staff is; we are very happy
about that--he and I have worked on legislation to make
insurance policies a little more affordable for beginning
farmers and ranchers.
I want to start with you, Mrs. Hoch, and just ask you. The
crop insurance groups you are representing here today have
endorsed the Crop Insurance for Future Farmers Act, the bill I
just mentioned that Senator Thune and I have and are going to
reintroduce. Can you talk about those unique challenges for
beginning farmers and why this legislation will help them
better manage risk?
Mrs. Hoch. Thank you, Senator, and great to be from the
same great State of Minnesota. Thank you for the question. It
is challenging. I mean, we have heard the discussion already
for a new farmer, and actually a young farmer, also a beginning
farmer, right? You do not only have to start farming young. As
you come in, there are--and I know personally--significant
investments that you need to make land we discussed, but also
equipment, right? The cost of equipment has become significant.
The inputs you need to buy your seed, your fertilizer, all
before you even know what the prices are going to be that you
will receive at the point that you harvest and if you will have
a harvest.
Crop insurance, especially for that beginning farmer, gives
them that certainty. That certainty is what we have all said is
so critical and important. Providing the premium support to
those beginning farmers, I endorse that. I am happy and
supportive of that because it also brings about education that
brings them----
Senator Klobuchar. Thank you.
Mrs. Hoch [continuing]. into the program right away.
Senator Klobuchar. Thank you. Well, Senator Hoeven has
walked in, and he and I, as I just mentioned before he even got
here, have partnered for years on legislation to improve access
to credit by modernizing loan limits for USDA loan programs.
New and beginning farmers are often deemed too risky of an
investment for commercial lenders, and high land values and
increased costs in recent years can be prohibitive for new
farmers. I guess I would ask you, Mrs. Durbin and Mr. Hopkins,
can you speak to the importance of updating these farm loan
limitations in the next farm bill? From your perspective as a
lender, are there other improvements we should consider making?
Mr. Hopkins. Thank you, Senator. I would be happy to
address that question. Like you mentioned, the increase in
capital expenses, along with just your normal operating costs,
have grown substantially over the last five years. When you
look at what land costs have done, the guarantee limits have
not kept pace in that time period. That would allow us as
lenders to have more tools in our belt to get creative with
producers as we work through these adverse times. Those
increased lending limits. I have talked to some of my lenders
from across the country, two years ago had already hit the
limits as they were trying to figure out how to work through
some of these losses with customers. Increasing those limits
would again give us flexibility to work with these producers to
keep them going.
Senator Klobuchar. Okay. Very good. Mrs. Durbin
Mrs. Durbin. Yes, thank you, Senator. I agree with what Mr.
Hopkins shared. I would also add that, given the rising cost of
inflation, that it is very important as we think about this
next farm bill to properly index that so that we do not have to
continue to keep coming back and asking for increases in farm
bills to come.
Senator Klobuchar. Okay. Mr. Rowe, the one last question
here, do the current USDA loan programs meet the needs of
younger farmers who rely on FSA lending programs? What
suggestions do you have to improve access?
Mr. Rowe. Thank you for the question, Senator. Yes, the
programs that are currently there do support farmers and also
young farmers, but some of the loans do not--some of the loan
programs are still a barrier for young farmers to get into like
for myself. I would say just to piggyback on that, just to
focus on more so understanding that young farmers come from a
different perspective of farming, more innovative, more hands-
on, and it does not take a lot of land for a farmer to be
diversified and successful.
Senator Klobuchar. Okay. Very good. Well, the Chairman has
returned, so I will give him back the gavel. I never actually
took it, but here it is. I think that Senator Hoeven is next,
so thank you.
Chairman Boozman. She will probably hit me with the gavel.
[Laughter.]
Senator Hoeven.
Senator Hoeven. Thanks, Mr. Chairman. I just want to
follow-up on a question Senator Klobuchar brought up. As she
said, we put in legislation that would raise the limits on both
the direct operating and the guaranteed ownership loans, as
well as the guarantee programs. We have done that before, and
that has been part of the farm bill as we reauthorize the farm
bill, and we certainly hope to do that again this time.
I would ask probably both Mrs. Durbin and also Caleb
Hopkins. I am going to give you the changes we made and just
let you react to them and see if you have any thoughts in
regard to it. The direct operating we increased from $400,000
to $750,000, the guaranteed operating we increased from $2.25
million to $2.6 million. The direct ownership we increased from
$600,000 to $850,000, and then the guaranteed ownership from
$2.25 million to $3 million. Then we also increase the loan
limits on the FSA Microloan program from $50,000 to $100,000.
My question would be I would like you to react to that,
starting with Mrs. Durbin, and then also particularly in
regards to some of our beginning farmers as well, big challenge
getting younger folks into farming and ranching.
Mrs. Durbin. Yes, so thank you, Senator, and thank you for
continuing to raise this important issue. As we have been
sharing today, you know, the input costs continue to rise, and
it is important for us to be able to work more closely with our
customers and help more farmers by using those increased loan
limits that really align with more modernized agriculture, and
so we appreciate your efforts in working toward that.
Specifically regarding our young, beginning farmers, we
work with our young, beginning, and small farmers to have
different underwriting standards, that they have a different
kind of bar to chin. It is not as high as what we would expect
someone who has been farming for 40 or 50 years to have to chin
when we think about experiencing and building your financial
position. That is one way that we work with our young,
beginning, and small farmers. We also put them through
different educational opportunities over their journey as
customers with us, and so allowing them the opportunity to
understand their financials, understand different decisions
that they make and how that impacts their operation, not only
today, but in years to come is something that we work very
closely with our young, beginning, and small farm customers at
Farm Credit Mid-America, and that is through our Growing
Forward program.
Senator Hoeven. Well, I am going to add to that. Also,
then, Senator Welch and Senator Tina Smith as well, who is
Member of this Committee, have introduced the Farm Ownership
Improvement Act where it would allow FSA to provide a pre-
qualification so that the borrower would actually, you know, if
they are going to acquire farmland or equipment, whatever it
is, they can actually get pre-qualified so they do not miss
out, for example, if they would go to an auction or to some
type of, you know, estate sale or something like that.
Bring that into the discussion too. I guess I am just
looking for any ways that we can enhance the program both for
established but particularly for new farmers, beginning
farmers.
Mrs. Durbin. Yes, so I think that opportunities like what
you are suggesting are important to our young, beginning
farmers, and the more ways that we can look for ways to help
encourage and incentivize them to get into agriculture is
important specifically for Farm Credit, as we think about our
mission to serve customers, not only in good but also in
challenging times. Those are great opportunities that I think
we need to further consider.
Senator Hoeven. Mr. Hopkins or Mr. Rowe, any thoughts on
enhancements?
Mr. Hopkins. Thank you for the question, Senator. I would
like to elaborate on the last part a little bit more. The
enhancement on pre-qualification would not only increase
efficiency within the FSA loan programs, but it would allow us
to get capital to those beginning farmers much quicker.
Proactive education is our best tool to help young and
beginning farmers as we look to the future. Pre-qualification
allows them to start those conversations much earlier. I hear
time and time again from young producers that once an
opportunity comes, in most instances in Iowa, you have four to
six weeks. You are seeing most of these farms go through
auction sale, not private sale like we used to. That is not
enough time to get through the process. The pre-qualification
enhancement would greatly, again, improve that for young and
beginning farmers to make sure that they are able to be
proactive on that decision.
Senator Hoeven. Yes, good to hear. Then, Mr. Rowe, any
thoughts on that?
Mr. Rowe. Thank you for the question, Mr. Senator. I
support this legislation, and thank you for taking the lead on
it.
Senator Hoeven. Okay. Again, thanks to all. We appreciate
you being here very much. Thank you, Mr. Chair.
Chairman Boozman. Senator Warnock.
Senator Warnock. Thank you, Chair Boozman. Before I get
started on my questions, I just want to recognize that among
this incredible panel of folks testifying, I am glad that we
got a Georgian on the panel. Mr. Sedrick Rowe is a first-
generation farmer from Albany, Georgia, and a graduate of Fort
Valley State University, one of our 1890 universities, land
grant institutions and an HBCU. Thank you so very much, Mr.
Rowe, for being here.
Underserved farmers, including historically marginalized
farmers, those with limited resources, and folks who served in
the armed forces face many structural barriers in starting and
running their farms. But one of those barriers, of course, is
access to credit. USDA's Farm Service Agency, or FSA, is
frequently called a lender of last resort because it provides
credit to folks like underserved farmers who are not eligible
for traditional loans.
Mr. Rowe, did you inherit your land?
Mr. Rowe. No, sir.
Senator Warnock. What role did FSA play in helping you
start your farm operation?
Mr. Rowe. FSA played a viable role when it came to
purchasing my farm. They helped me when it came to
understanding the value of land, understanding how production
can be, you know, operated on that land. FSA, without them, it
was kind of hard for me to purchase my first land.
Senator Warnock. It was critical for you being able to get
started?
Mr. Rowe. Yes, sir.
Senator Warnock. Many underserved farmers do not inherit
their land, as is the case with you, and cannot afford to buy
it, which is why these loan programs are so critical.
Historically, USDA has not equitably administered these
programs. In fact, many black farmers in Georgia and across the
country have historically experienced blatant discrimination at
the hands of FSA, and that is why I was so glad to fight to
secure financial assistance for farmers who had experienced
discrimination at the hands of FSA and the Inflation Reduction
Act. I am glad that the Biden Administration was able to get
that money out to those farmers. But in addition to
acknowledging past wrongs, we need to make sure that these
lending programs work for today's and tomorrow's underserved
farmers.
Mr. Rowe, what changes to FSA's lending programs would you
recommend so that these programs work better for underserved
farmers?
Mr. Rowe. Thank you for your question, Senator. As stated
in my testimony, I think it is important that USDA carry on
what they started by prioritizing financial stability for
farmers, offering more flexible terms, emphasizing saving and
reserve payment schedules, avoid unnecessary impacts to balloon
payments, and also the appropriate collateral requirements.
That is a big issue when it comes to getting a loan,
collateral.
Senator Warnock. Of course, you have seen this up close.
You know, this is your own story and what it has meant for you.
It was helpful for you. But this is an important issue for all
of us. The average age of the American farmer is reaching 60
years old, so it is in our enlightened self-interest to make
sure that we provide a path for all of our motivated young
people who have the grit, the work ethic, the skills to farm
but need a path. That is the case in a number of sectors.
Aviation sector is another. That is for another Committee, but
it is such an important issue.
Farmers today are experiencing an overall lack of
certainty. They are dealing with high input costs like fuel and
fertilizer, as well as changing weather patterns and a longer
and stronger hurricane season brought on by climate change.
USDA programs aimed at helping farmers manage risk, like
commodity support programs, crop insurance, and disaster
assistance programs have not been updated to reflect everything
that has changed since the last farm bill was enacted in 2018.
Mr. Hopkins, will uncertainty in the farm economy help or
hurt your ability to provide credit?
Mr. Hopkins. Uncertainty always provides added risk. Crop
insurance is the number one tool that agriculture lenders have
to help mitigate that risk. The second one is the increased
reference prices that are needed in an updated farm bill.
Agriculture lenders that I have all talked to, we look at those
two as a one-two punch.
Senator Warnock. Right. The folks you are trying to help
right now, they are planning for the upcoming season. In the
last two months, President Trump has threatened and rolled back
tariffs on our largest trading partners, which farmers rely on
for inputs critical to making fertilizer, as well as export
markets they have worked hard to open. Mr. Rowe, which farmers
do you think are hurt worse by uncertainty from tariffs, the
giant farming operations or small and underserved farmers?
Mr. Rowe. Thank you for the question. All farmers are
affected by tariffs, but small and beginning farmers are still
out of the picture when it comes to that.
Senator Warnock. Yes. Thank you, both of you, for your
testimony.
Chairman Boozman. Senator Marshall.
Senator Marshall. Thank you, Chairman, and welcome to all
of our guests, panelists as well. My first question will be for
Mrs. Durbin. Mrs. Durbin, you probably know this, but we lose
more farmers to suicide than we do from farming accidents. We
are losing one, two, three farmers a day now to suicide. It is
said that the rate of suicide in farmers is multiple compared
to other professions. I think the reasons to me are somewhat
obvious. The stress is real out there. It is very real in
farmland, and I bet the suicide rate in farmers is
proportionate to their debt and their net income as well.
The added stress for a farmer is that this is not just a
business I started. I am a fifth-generation farm kid, my
children would be the sixth, and I have grandchildren who would
be the seventh. All over Kansas, sixth, seventh generation
farmers and ranchers are feeling that challenge so that the
stress is real. Farmer suicide is very real as well. It is not
often talked about, but Farm Credit is actually out there
leading, trying to educate farmers how to recognize it, how to
be a good neighbor.
I just want to compliment you, and maybe you could share a
little bit about your program. There is no one that knows that
customer--a good farm loan agent, community bank, Farm Credit
knows their customer, and they know when that stress is real.
Maybe you could talk a little bit about what you are doing to
try to address that farmer suicide rate.
Mrs. Durbin. Thank you, Senator, for raising that question
to me today. You know, what you shared is real, and I think we
all could agree that if we look back over history, you know,
farmers are no stranger to, you know, challenge, and our
farmers are resilient. You know, I know some of this firsthand.
I am a farmer myself. My husband and I have our own farming
operation, and I understand the stress that comes with that.
Farmers have the most faith of anyone I know.
Senator Marshall. They do.
Mrs. Durbin. When you think about that, there is so much
out of their control. You know, they cannot control the
weather, they cannot control prices, and so there is a lot of
stress that comes with that. When you think about the current
economic environment in agriculture, that stress is compounded,
right?
One of the things that I continue to be extremely proud of,
not only as a farmer, but working for the Farm Credit System,
specifically Farm Credit Mid-America, and the ways that we are
partnering with our industry partners to help our customers
experiencing that stress. One of the things that we have done
as a system is partner with the American Farm Bureau, the
National Farmers Union on the resilience relief, which is a
free program for online help and coaching to farmers, farm
families that are experiencing that stress and helping them
work through that stress and how to do that in a way that helps
them thrive coming out on the other side.
For me, working for an organization and the Farm Credit
System that truly keeps the customer at heart, you know, our
109-year-old mission is to serve all of agriculture and to be
there for customers in good and challenging times, providing
reliable credit to our farmers. That is something that I am
extremely proud of, and I appreciate that you have raised that
question today.
Senator Marshall. Yes. Just in case anybody is out there
watching, listening, I think the number is 988. Lacy, is it
988? The 988 number you can call if you are having suicidal
thoughts. Maybe it is your neighbor, though, that is having--
you know, you recognize something about your neighbor, that
they are not sleeping well, that they are not going to the high
school basketball games this time of the year, they are not
going to church, that you might recognize something. Be a good
neighbor and say, hey, let's go get a cup of coffee or, if it
is really bad, let's call 988.
Let's go to Mrs. Hoch next. You deal with crop insurance
every day, right?
Mrs. Hoch. Yes.
Senator Marshall. Okay. I want to make sure I understand,
why is crop insurance increasing so much? I mean, I assume it
is. Is it input costs? Is it Mother Nature? Why are crop
insurance rates going up?
Mrs. Hoch. Yes. I mean, I think crop insurance creates
certainty.
If I can comment on your previous----
Senator Marshall. Oh, please do.
Mrs. Hoch [continuing]. question, we are passionate at RCIS
around the mental health and wellness of our farmers. It is a
topic we have been trying to raise more to the forefront, so I
love that you raise that.
As crop insurance, actually, our adjusters are out there on
the frontline in the moment when that loss occurs, and, having
been there myself, it is extreme stress for a farmer. You are
thinking about the loan you have to pay off, you are thinking
about your family, you are thinking about education for your
kids, and you are facing a loss and not quite sure what is
going to happen. Those crop insurance agents, we have created
training for them to be first responders, to have a sense of an
awareness when they are interacting even with a farmer out in
the field in that loss-adjusting moment. There are so many
moments that we can all take to be good neighbors, to be
careful and thoughtful about the mental health and wellness of
those around us. I wanted to----
Senator Marshall. Thank you.
Mrs. Hoch [continuing]. add that. I think it is so
important to share.
Senator Marshall. If I could share one thing back with you,
and I talked to this with Farm Credit. You need to make sure
that your own employees get some TLC after those events as well
because it is traumatic to them as well. No one likes to go in
and have a metal shed sale. No one likes to go in there in
these traumatic events and work the adjustment. It is tough on
your employees too.
Mrs. Hoch. Very much agreed. Back to your first question,
crop insurance is a really important tool. The availability of
that to all farmers across the country is critical to this
program, ensuring that it is affordable, that it is widely
available, that it serves our farmers across all crops, and
that, important to the program itself, that it is actuarially
sound, that we have the right data, we have the right
understanding of those products to make sure that they are
available to serve our farmers in America when they need it the
most.
Senator Marshall. When I ask people why is flood insurance
going up so much, and the answers would be, well, it costs a
lot more to replace a home, and there are more storms, there
are more floods. In crop insurance, is it also a reflection,
though, of just rising input costs and interest rates as well?
I assume there are some reasons.
Mrs. Hoch. Yes, the cost of crop insurance will be driven
by two predominant things, the yields that come out, and those
yields can be impacted by weather, they could be impacted by a
farmer's particular choice around seed or inputs that they put
into their crop, and it will be absolutely impacted by the
commodity price.
Senator Marshall. Thank you. Thank you so much, Chairman.
Sorry to go over. I yield back.
Chairman Boozman. No, thank you. That was really an
important line of thought and questioning. Senator Moran.
Senator Moran. Chairman Boozman, thank you.
The Chairman's mark of his farm bill framework extends this
opportunity for beginning and veteran farmers to get a benefit
on crop insurance for the first five years and extends that to
ten. Can someone tell me the value of that? I think, Mr. Rowe,
maybe you are a beneficiary of that program. Five to ten years,
does that make a difference in what we are trying to accomplish
in encouraging beginning farmers to begin farming and to stay
in farming?
Mr. Rowe. Thank you for the question. Yes, sir, five to ten
years, that is reasonable time based on my experience and what
I see with my colleagues.
Senator Moran. What kind of benefit does this crop
insurance--what does that benefit look like to you?
Mr. Rowe. It is already a risk itself, so with crop
insurance, it basically gives me a sigh of relief that, no
matter what happens, I have someone that can, you know, not say
take care of the debt I may have to face, but also give me a
starting point to be able to move forward.
Senator Moran. In the absence of crop insurance, what would
your circumstance have been in starting your operation, and how
would your relationship have been with your banker if you could
have gotten a relationship with a banker?
Mr. Rowe. Thanks for the question. The banker would have
loved that a lot, knowing that I had a way to be able to take
care of my loan. With the crop insurance, for me, personally,
it helped me when it comes to knowing what I am going to plant
that year and knowing that I am covered no matter what type of
payment I may have. But without that crop insurance, you are
really taking a big risk.
Senator Moran. In your specialty crop world, crop insurance
is working on those crops, working well?
Mr. Rowe. No, sir. The specialty crops that I grow, they do
not offer crop insurance for such as hemp. That is a fairly new
crop in the State of Georgia, and a lot of crop insurance do
not want to take the risk, like I say, when it comes to that
crop.
Senator Moran. Mrs. Hoch, I think you testified--my notes I
can hardly read--but you cautioned us about disaster assistance
that damages the viability of crop insurance, that you could
have a disaster program, I suppose, that diminishes the desire
of farmers to purchase crop insurance and spread those risks
among producers. Tell me more about that. I guess my question
is, what about the disaster assistance that we provided in
January, in December? Is that an impediment to crop insurance?
Mrs. Hoch. Thank you for the question. The disaster relief
that was provided, these are critical sources of funds to
farmers. They are going to help, particularly as they are
looking to pay down operating loans when there has been
multiple years.
My point around it is, crop insurance, we cannot cover
every single gap. We are not here for every single situation
that could occur, so there are moments when disaster aid is
incredibly important. My hope is, is that we can continue to
work together to find more opportunity, to find more products
that can work, that can be actuarially sound, and help cover
some of those gaps so that it is distributed out in a fair and
equal way through a very efficient system which the public-
private partnership has built. It gets those payments to a
farmer in a very efficient, fast, and effective way.
Senator Moran. Are the circumstances in which actuarially
sound occurs, are they increasing or decreasing?
Mrs. Hoch. Sorry, could you repeat that?
Senator Moran. Yes, the question is, crop insurance is
becoming more available or less available because of the
requirement of actuarially sound? Are we able to get more crops
covered and be actuarially sound, or has it become more
difficult? The gaps you talk about, are they increasing or
decreasing?
Mrs. Hoch. I think that the gaps are decreasing, and we
would like to see them continue to decrease more. The
importance is obtaining that data underneath on the products
using the 508(h) process that the act allows for to be able to
bring forth that data, to get that actuarial soundness so that
you can provide crop insurance to that product.
Senator Moran. That 508 process, is it used to provide new
insurance products or modify existing or both?
Mrs. Hoch. Both.
Senator Moran. Okay. I think those are my questions. Thank
you very much.
Oh, Mr. Noble, I am saddened to hear the story that you
told today. I am sorry that you have a personal circumstance,
and it is the--you know, a primary reason I asked Kansans to
give me the chance to represent them here is to try to make
sure that rural America is alive and well. While I do not know
your family's operation well, it has a reputation of being
solid and pillars of the community, and it is a real--the loss
is economic as well as just like leadership within the
community. The future of the places that most of us come from
is determined on whether people like you and your family are in
business and are part of the community, and I am saddened by
what you described today is occurring.
Mr. Noble. Thanks for your word, Senator. I appreciate that
greatly. As we were able to reconnect earlier, you and I have
been able to work together on agriculture policy for a long
time. It is great to see you in this Chair, and I appreciate
your comments. I will pass them on to my family.
Senator Moran. Please do. Thank you. Mr. Chairman, thank
you. Mr. Chairman, it is a long way from you to me.
[Laughter.]
Senator Moran. I do not really like it.
[Laughter.]
Chairman Boozman. Thank you all. Thank you again for being
here. The hearing today was really outstanding, and we got a
lot of good information that, along with our other hearings,
just kind of reinforces each other about the need to get a
good, strong farm bill and the programs you describe, you know,
the need to improve on those, which, again, we are quite
willing to do. This is how you do it is listening to the people
who are literally out in the fields every day, you know, trying
to make a living. The answers need to come from the bottom up.
Thank you for being here. The record will remain open for
five days. Today's hearing is now adjourned.
[Whereupon, at 4:11 p.m., the Committee was adjourned.]
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