[Senate Hearing 119-348]
[From the U.S. Government Publishing Office]
S. Hrg. 119-348
GROWING THE SMALL BUSINESS
AGRICULTURAL ECONOMY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON SMALL BUSINESS
AND ENTREPRENEURSHIP
OF THE
UNITED STATES SENATE
ONE HUNDRED NINETEENTH CONGRESS
SECOND SESSION
__________
JANUARY 14, 2026
__________
Printed for the use of the Committee on Small Business and
Entrepreneurship
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
48-710 WASHINGTON : 2026
=======================================================================
COMMITTEE ON SMALL BUSINESS AND ENTREPRENEURSHIP
ONE HUNDRED NINETEENTH CONGRESS
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JONI ERNST, Iowa, Chair
EDWARD J. MARKEY, Massachusetts, Ranking Member
JAMES E. RISCH, Idaho MARIA CANTWELL, Washington
RAND PAUL, Kentucky JEANNE SHAHEEN, New Hampshire
TIM SCOTT, South Carolina CORY A. BOOKER, New Jersey
TODD YOUNG, Indiana CHRISTOPHER A. COONS, Delaware
JOSH HAWLEY, Missouri MAZIE K. HIRONO, Hawaii
TED BUDD, North Carolina JACKY ROSEN, Nevada
JOHN R. CURTIS, Utah JOHN W. HICKENLOOPER, Colorado
JAMES C. JUSTICE, West Virginia ADAM B. SCHIFF, California
JON HUSTED, Ohio
Meredith West, Republican Staff Director
Sean Moore, Democratic Staff Director
C O N T E N T S
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JANUARY 14, 2026
Opening Statements
Page
Joni Ernst, U.S. Senator from Iowa, Chair........................ 1
Edward J. Markey, U.S. Senator from Massachusetts, Ranking Member 2
Witnesses
Ms. Melissa Spurgin, Chief Financial Officer, First Iowa State
Bank........................................................... 5
Prepared Statement........................................... 7
Mr. Erbin Crowell, Executive Director, Neighboring Food Co-op
Association.................................................... 9
Prepared Statement........................................... 12
Mr. James ``Jay'' Funke, Co-Owner and Past President, Del Clay
Farm Equipment, LLC............................................ 21
Prepared Statement........................................... 23
Ms. Maria Moreira, Founder and Board Chair, World Farmers........ 25
Prepared Statement........................................... 27
Additional Letters/Statements for the Record
Letter to the Small Business Administration dated January 9, 2026 49
Berkshire Strategic Alliance, Inc., Letter Dated January 10, 2026 51
Questions for the Record
Ms. Melissa Spurgin Responses to Questions Submitted by Senator
Scott.......................................................... 57
Mr. James ``Jay'' Funke Response to Question Submitted by Senator
Scott.......................................................... 59
GROWING THE SMALL BUSINESS AGRICULTURAL ECONOMY
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WEDNESDAY, JANUARY 14, 2026
United States Senate,
Committee on Small Business
and Entrepreneurship,
Washington, DC.
The committee met, pursuant to notice, at 2:33 p.m., in
Room 428A, Russell Senate Office Building, Hon. Joni Ernst,
chairwoman of the committee, presiding.
Present: Senators Ernst [presiding], Young, Husted, Markey,
Cantwell, and Shaheen.
OPENING STATEMENT OF SENATOR ERNST
Chair. I call the Committee on Small Business and
Entrepreneurship to order. Folks, it's the start of a new year,
and I'm excited to kick it off discussing the ways we can
supercharge Main Street and promote economic growth across our
rural communities.
This committee routinely looks at the integral role small
businesses play in our economy and our lives, especially in our
rural communities, where small businesses represent over 96
percent of all employers, and provide nearly 57 percent of all
jobs.
I grew up on a farm in Southwest Iowa, and currently live
in Red Oak. Still, today, I know the local small business
owners who run the stores and shops around me, and experience
firsthand how ingrained they are in our agricultural community,
not to mention the role of America's original small business
owners, family farmers. After all, these are my neighbors and
my friends. They carry on the spirit of entrepreneurship that
runs deep throughout rural America.
Despite the importance of these small businesses to rural
agricultural communities, they have faced numerous challenges
in securing affordable access to capital, essential to their
survival. The SBA's 7(a) loan program was established to help
address some of those gaps.
But under the Biden administration's mismanagement, we saw
the opposite. The share of lending to rural small businesses
declined year after year. The reason for the decline is no
mystery. While the Biden administration was recklessly slashing
lending standards and eligibility rules in the 7(a) program, it
was building up regulatory hurdles in the private sector and
ignoring the challenges faced by the small community banks that
serve rural and agricultural entrepreneurs, including their
challenges in utilizing the 7(a) program itself.
Luckily, President Trump and SBA Administrator Loeffler
have overseen a tremendous turnaround in lending to rural
communities with the dollar value of all 7(a) lending to rural
small businesses in the first year of the new administration
increasing by nearly 20 percent over last year.
However, many rural community banks still find it
incredibly difficult to fully and actively participate in the
7(a) loan program due to unnecessary red tape and overly
complex requirements that do not account for the unique needs
and operations of rural small businesses. Many community banks
also worry that their inability to dedicate staff to SBA
compliance will jeopardize their ability to rely on the 7(a)
loan guarantee.
This red tape shouldn't be what stands in the way of
reaching borrowers who can benefit from 7(a). That is why I
called Administrator Loeffler earlier this week to report to
this committee on the resources and efforts the SBA has made to
promote greater participation by rural community banks in SBA
loan programs.
I ask unanimous consent to enter into the record my January
9th letter requesting information from the SBA on its efforts
to assist rural community banks. Without objection, so ordered.
In the letter, I also asked what the SBA is doing in the
new year to reduce compliance and paperwork burdens for rural
community banks so they can reach more rural and agricultural
small business owners.
We must also do our part in the Senate. We made headway
when the committee reported out my bipartisan bill with Senator
Coons, the Made in America Manufacturing Finance Act, which
will increase the SBA-backed loan limit from $5 million to $10
million for small manufacturers. A companion to our bill has
passed the House of Representatives, so I do hope that we can
get these loan limit increases enacted in the coming weeks to
complement the Ernst/Coons bill.
I also introduced my Modernizing Agricultural and
Manufacturing Bonds Act, which will modernize IRS rules for
rural development bonds. It is only through concerted
coordinated efforts and thoughtful legislation that we will be
able to cut the red tape hampering community lenders and give
our rural agricultural small businesses the room and capital to
grow.
I am grateful that we're joined today by our panel of
witnesses. I look forward to hearing from them to see how we
can help both rural entrepreneurs and the community banks that
serve them. I now recognize Ranking Member Markey for his
opening statement.
STATEMENT OF SENATOR MARKEY
Senator Markey. Thank you, Madam Chair, very much, because
today we're here to talk about supporting local farms, grocery
stores, food banks, other small businesses that make up the
rural agricultural community economy in our country. And these
small businesses are key to feeding local communities, creating
jobs, building sustainable food systems.
Unfortunately, the agricultural economy is being crushed by
the Trump administration's attack on rural communities. In
President Trump's playbook, MAGA really means Making
Agriculture Go Awry, and we're seeing it as it cascades down
onto the kitchen tables of people in America.
Grocery costs are dramatically up. Over last year, coffee's
up 20 percent, beef's up 16 percent, bananas are up 6.5
percent. Food prices went up 3.1 percent in 2025 in the Trump
administration. And Trump keeps saying that affordability is a
fake word. But it's not a fake word for small businesses, not a
fake word for consumers when something's up 3.1 percent.
In fact, his agriculture committee strategy is bananas,
okay, in terms of what he's doing, all across the board from
tariffs to every other policy which he has. His tariffs
threatened to bankrupt thousands of family farmers who are
seeing their own prices increase, and their exporting
opportunities squeezed as other countries retaliate with
tariffs of their own.
President Trump's immigration policies are spreading fear
in our neighborhoods and making it even harder for rural
businesses and small farms to find hard working employees, a
longstanding issue in rural communities.
And we cannot ignore President Trump's disastrous
healthcare policies. With the passage of President Trump's big
ugly bill, hundreds of rural hospitals will likely close or cut
services of to 22 million Americans who just saw a dramatic
increase in their health insurance on January 1st, just 12 days
ago. Ten million of them are small businesses, all work at
small businesses, 10 million up to 22 million.
And a lot of these farmers, you know, they belong to farmer
co-ops. They're Rotarians, they're the lifeblood of Main Street
across rural America. And he's turning Main Street into Pain
Street, you know, for these people, healthcare, electricity,
energy costs, food costs, all the way across the board.
And it's just that the Republicans are just clueless,
callous and it's the cruel decision not to extend the
Affordable Care Act, their enhanced tax credits. That's going
to mean thousands of rural small businesses and their employees
are going to see healthcare costs skyrocket.
In fact, they're facing in rural America a 28 percent
higher increase than those who live in cities. America was
already struggling with climate change impacts, rising housing
costs, retraining workers, finding a path forward for their
small businesses when they decide to retire. But we have to
address these issues, support our farmers, fishermen, ranchers
in rural America, and not make it harder for them to exist.
In Massachusetts, more than 7,000 small farms and thousands
of small businesses support our local agricultural economy.
These local producers lead the way in sustainable and
innovative agriculture, cutting down greenhouse gas emissions,
treating workers fairly and feeding local communities and
schools.
If President Trump were serious about supporting rural
communities, he would be investing in small local producers
rather than prioritizing large multinational agricultural
corporations that routinely violate workplace and environmental
laws.
And while creating a small business blight, President Trump
is beefing up the pockets of his billionaire buddies. These
corporations receive extreme favorable treatment from the
largest buyer of goods and services in the world, the United
States government, when it is small producers that are leading
the way in creating local sustainable food systems.
In Fiscal Year 2024, nearly $5 billion in food spending by
the Department of Agriculture went to just 25 companies. Those
aren't small farmers, and that's why I introduced the Effective
Food Procurement Act, which would provide more federal
contracting opportunities for small producers, small farmers
that are using sustainable practices and treating employees
fairly.
It's important that we provide those pathways for small
businesses inside of our food systems. Food is more than what
we see on our plate. It is the labor of farmers and farm
workers, the health of our environments, and the cornerstone of
growth for many rural economies. So, today, I look forward to
hearing from our witnesses about how we can further our shared
goals to help small businesses in the agricultural community.
Thank you.
Chair. Great. Thank you, Ranking Member Markey. And again,
I want to extend a warm welcome to all of our witnesses, and I
am thankful that you all took time out of your busy schedules
to come to Washington, DC to share your expertise on how we can
improve America's rural agricultural economy.
I will now introduce the two witnesses who are here today
to testify on behalf of the majority. And first, is Ms. Melissa
Spurgin. She is from Albia, Iowa, and is the Chief Financial
Officer of first Iowa State Bank, where she has worked for over
22 years. She previously served as Vice President of First Iowa
State Bank. Ms. Spurgin holds a bachelor's degree from St.
Ambrose University and an MBA from Capella University.
And next, Mr. Jay Funke. Jay is from Edgewood, Iowa, and is
the owner of Del Clay Farm Equipment, a family-owned farm
equipment dealer business. Del Clay Farm Equipment has been in
business for over 25 years, and provides new and used farm
equipment to farmers throughout Northeast Iowa. Mr. Funke holds
a bachelor's degree from Loras College.
And thank you, again, I now recognize Ranking Member Markey
to introduce his witnesses.
Senator Markey. Thank you, Madam Chair. Mr. Erbin Crowell
serves as Executive Director of the Neighboring Food Co-op
Association, a cooperative federation of retail grocery co-ops
across New England and New York State. And he has nearly three
decades of experience in cooperative business and food system
development, and serves on the boards of the National
Cooperative Business Association and the New England Farmers
Union. He lives with his family in rural western Massachusetts.
Ms. Maria Moreira is the founder and board chair of World
Farmers which is based in Lancaster, Massachusetts. Her
perspective as a farmer, a business owner, an immigrant, has
fueled her passion to advocate for small scale farmers for over
45 years. She is also vice chair of the Rural Coalition Board
of Directors and has served as farm service agency county
committee advisor for nine years and was a member of the USDA
Beginning Farmer and Rancher Advisory Committee.
She's just been a leading voice in identifying and
establishing market opportunities for ethnic crops and
increasing access for culturally appropriate crops for
immigrant and refugee communities, and we look forward to
hearing from both of them.
Chair. Wonderful. Thank you, Ranking Member Markey. And
briefly, I'll take a moment and explain the lighting system in
front of you. There are three lights in front of you. Green
means go. Yellow means you're running out of time, and red
means please wrap it up quickly.
I ask unanimous consent that the witness's full statements
be included in the record. And without objection, so ordered.
As your written testimony has been made part of the record, the
committee asks that you limit your oral remarks to five
minutes. And with that, Ms. Spurgin, you are recognized for
five minutes for your testimony.
STATEMENT OF MS. MELISSA ANN SPURGIN, CHIEF FINANCIAL OFFICER,
FIRST IOWA STATE BANK, ALBIA, IOWA
Ms. Spurgin. Thank you, Madam Chair, Ranking Member, and
members of the committee. Thank you for the opportunity to
appear before you today. My name is Melissa Spurgin, and I'm
the Chief Financial Officer of First Iowa State Bank, where we
serve rural communities across Southern Iowa.
I appear before you today on behalf of rural banks that
underutilize SBA loan programs, rural banks play a critical
role in financing small enterprises. We rely heavily on local
knowledge, longstanding relationships, and firsthand
understanding of our communities, not just standardized
financial metrics.
Our limited use of SBA programs is not philosophical, it's
structural. In many rural banks, a single lender, single lender
may handle commercial ag and consumer lending. But SBA programs
were largely designed for lenders with scale and specialized
staff. SBA loans require significantly more documentation,
certifications, and post-closing compliance than conventional
loans. With lender staff requiring continuous training due to
frequent rule changes, the departure of just one employee can
eliminate a bank's SBA capability entirely.
This is especially challenging because rural businesses
typically need smaller loans, not multimillion dollar
financing. SBA underwriting and servicing costs, both in terms
of compliance and staffing, are largely the same regardless of
loan size or market area.
So, the economics often do not work for the small dollar
loans. Most common in rural communities, little weight is given
to the judgment of experienced rural lenders with specific
requirements around aspects of loan of a loan like debt service
coverage ratio that do not account for seasonal or cyclical
income patterns. This results in credit worthy businesses
failing underwriting, not because they cannot repay, but
because of timing. Mismatches in cash flow equity injection
requirements similarly fail to reflect rural asset structures.
Many rural businesses are asset rich, but cash poor with wealth
tied up in land, equipment or other assets accumulated over
generations. Collateral and personal guarantee requirements
also need greater flexibility.
Rural assets are often inherited, jointly owned, or held in
trusts. SBA collateral rules can require costly and time-
consuming legal restructuring simply to pledge assets or obtain
guarantees. Documentation alternatives should also be permitted
for long established rural businesses with informal but
reliable operating histories.
Community bank relationship knowledge should be recognized
as a compensating factor in underwriting aligning. SBA
underwriting with rural economic realities would expand access,
increase program utilization in rural markets, and do so
without materially increasing default risk. These are
flexibility improvements, not loosened standards.
Rural banks also have significant concerns about the risk
of technical default and guarantee claw backs. SBA guarantees
can be denied or reduced due to minor paperwork or procedural
errors, even when the borrower performs as agreed. And rural
banks typically lack the in-house SBA specialist or legal teams
to manage this risk. A single denial of a guarantee can have a
meaningful impact on a small bank's capital.
In practice, the guarantee is only as reliable as the
compliance process, and that process has proven unforgiving. As
a result, rural banks continue to lend, but we do so outside
SBA programs, we rely on portfolio loans, relationship-based
underwriting, flexible renewals during downturns, faster credit
decisions, and long-term customer support.
During economic stress, rural banks are lending, but we are
not able to reach every credit worthy rural entrepreneur
without SBA support borrowers most affected our startups and
those on the economic margins of rural communities. The path to
greater rural bank participation is reducing friction in the
system.
I believe Congress and the SBA can better achieve the goals
of supporting entrepreneurs and increasing access to capital in
rural America by doing the following; easing the compliance
burden and cost structure for smaller loans and for loans in
rural areas, recognizing the value of the judgment and
relationship knowledge of the community banker, providing
flexibility and acceptable equity collateral and personal
guarantee requirements and how they're documented, ensuring
greater clarity so banks can truly rely on the SBA guarantee
without risking a claw back on a technicality. And more
effectively marketing resources such as the small business
development centers to ensure both banks and borrowers
understand what support exists.
The SBA with these reforms can be better and a more
impactful partner with community banks in Iowa and across the
country. We stand ready to be a partner in helping achieve this
worthy goal.
Thank you for the opportunity to share these perspectives,
and I look forward to answering your questions.
[The prepared statement of Ms. Spurgin follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair. Thank you, Ms. Spurgin. And is it Mr. Crowell or
Crowell?
Mr. Crowell. Either.
Chair. Very easy. So, thank you, Mr. Crowell. Go ahead, and
thank you. You have five minutes for your testimony.
STATEMENT OF MR. ERBIN CROWELL, EXECUTIVE DIRECTOR, NEIGHBORING
FOOD CO-OP ASSOCIATION (NFCA), SHELBURNE FALLS, MASSACHUSETTS
Mr. Crowell. Thank you, Chair Ernst, Ranking Member Markey,
and members of the committee. Thank you for this opportunity to
testify before you. We certainly appreciate your focus on this
issue, and the chance to discuss the role of cooperatives and
credit unions in building thriving local economies and
agricultural systems.
My name is Erbin Crowell, and I serve as Executive Director
of the Neighboring Food Co-op Association. I'm also a board
member of the National Cooperative Business Association and the
New England Farmers Union. I've nearly three decades of
experience in co-op and food system development, beginning as a
member of equal exchange worker co-op based in West
Bridgewater, Massachusetts.
As the committee works to craft thoughtful policy, co-ops
should continue to have a significant role in creating thriving
local economies. I want to recommend the following improvements
in key supports. First, providing access to capital through the
SBA by crafting alternatives to current lending requirements
for co-ops.
Second, ensuring that a generation of small business and
family farms are preserved through outreach and education on
the cooperative business model. And third, ensuring that key
support for cross-agency collaboration and technical assistance
for co-ops is available through federal programs and
initiatives.
The Neighboring Food Co-op Association was founded in 2011
to support the growth and development of food co-ops in the
Northeast U.S., and we also partner with local producers and
other co-ops to strengthen the regional food system and
economy, and collaborate with the NCBA and the New England
Farmers Union on policy advocacy related to agriculture, food
security, and co-ops and credit unions.
Our region is home to many farm and fishery co-ops, worker
co-ops, housing co-ops, and credit unions, as well as several
utility co-ops. But food co-ops are particularly prevalent.
There's 60 food co-ops operating 70 storefronts, locally owned
by almost 300,000 people.
These range from large multi storefront retailers to small
rural grocery stores. Our co-ops are focused not just on
accessing healthy food, but sustaining jobs, strengthening food
security, and providing markets for local producers, with a
third of our sales being local products. And that's compared to
about two to five percent in supermarkets.
It's also important to note that a half of all U.S. farmers
are members of at least one cooperative. Co-ops tend to be
multi-generational, maintaining crucial infrastructure and
markets for their members and their communities. For example,
78 percent of agricultural co-ops are more than 50 years old
with Iowa, Texas, and California leading in the number of farm
farmer co-ops. Without these enterprises, rural people would
not be able to fully participate in the modern economy.
Similarly, most of our food co-ops in the northeast are in
rural and underserved areas, and have been in operation for
decades. Several were founded during the Great Depression era,
with a second wave in the '60s and '70s, and more startups
opening in the past decade.
An area where co-ops offer a solution is in business
succession. Small businesses are the backbone of our
communities, and yet we're in the middle of a watershed moment
in Main Street America where across our country, many small
businesses are owners are swiftly approaching retirement age,
and the average age of farmers is 58 years old.
So, while some owners may choose to close or sell to an
outside investor, a better option is to sell to a worker,
producer, or consumer co-op. This ensures that the owner
benefits financially, and their legacy is preserved along with
accessing goods and services that would otherwise be lost.
My own region, we have an example of old creamery co-op,
which is a rural grocery store that when their members decided
to retire, they sold it to the people who loved it as much as
they did; the people who shopped there. We also have a worker
co-op called Real Pickles that became owned by its workers over
10 years ago, preserving jobs in the community.
Despite the demonstrated success, impact and resilience of
co-ops, an ongoing challenge continues to be access to capital
and appropriate technical support. The shared ownership
structure of co-ops makes it makes them unable to access
financing through SBA due to lending requirements that are not
feasible for co-op businesses, and in that can include hundreds
or even thousands of member owners.
During the COVID-19 pandemic, the personal guarantee policy
was temporarily removed with many positive outcomes for co-ops
including Real Pickles which was able to not only maintain its
business, but grow 25 percent in revenue since the end of the
pandemic. We also have a retail co-op, Franklin Community Co-
op, which received a loan and has been able to not only grow,
but is now plan planning a major expansion.
Unfortunately, we've seen a lot of changes in instability
in the economy. And so, we believe that by improving policies,
SBA can help ensure that small business people, employees,
farmers, and ranchers, and especially young and beginning
farmers, can harness the power of the co-op business model to
address the urgent challenges and opportunities in our rural
communities. For example, the Improving SBA Engagement Act, the
Main Street 2.0 Act, and other opportunities to increase
interagency collaboration.
In summary, co-ops offer a time-tested successful and
impactful tool for addressing the challenges we face in these
unstable times. They have a track record of success and they
can grow and serve our communities better with some basic
policy changes.
So, thank you again, Chair Ernst, Ranking Member Markey,
members of the committee. Look forward to your questions. Thank
you.
[The prepared statement of Mr. Crowell follows.]
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Chair. Thank you very much. And next, we'll turn to Mr.
Funke, and you are recognized for five minutes.
STATEMENT OF MR. JAMES ``JAY'' F. FUNKE, SALES MANAGER, DEL
CLAY FARM EQUIPMENT, EDGEWOOD, IOWA
Mr. Funke. Thank you, Chair Ernst, Ranking Member Markey,
distinguished members of the Small Business and
Entrepreneurship Committee. Thank you for the opportunity to
testify on current conditions of Ag business and rural economy.
I grew up on a family farm, attended Loras College, came
back and have spent 45 years in Ag business, 39 years in
ownership in two different Ag businesses in Edgewood, Iowa.
Edgewood is a community in Northeast Iowa with a current
population of 904, and I since found out, we're at 908. So,
we're growing.
Our business community has been very active and been able
to roll with the changes, working together as a community
supporting local businesses and a strong work ethic with
continuity and ownership of businesses. I've been a member of
the Iowa Nebraska Equipment Dealers Association since 1992,
serving 10 years as a board member, chairman, and current
position as past chairman.
Like most members of rural communities, I have served on
many committees and spent over 30 years on economic development
in Edgewood. I have been around long enough to experience highs
and lows in the Ag business and our rural economy as our
farmers' income has dropped in the losses of around $200 an
acre are common.
The impacts can be felt in the small businesses supporting
those farmers. Our association monitors our member dealers and
reports large equipment sales are down 26.5 percent through
October of 2025 versus 2024. The decrease in sales causes other
problems. We have larger inventories than needed for the
current sales volume, causing higher interest cost, which can
lead dealers to dump inventory and take losses on equipment.
Ultimately, this creates losses on the income statement
that will be reflected on the balance sheet. And as that
happens, we stop buying vehicles or replacing tools, cut
advertising, and the list goes on. Rural small business owners
all experience problems like these when the farmers they depend
upon start to hurt.
We have always offered financing to our customers, and the
need today is greater than ever with increasing equipment
costs, making it harder for small farmers to afford the
equipment. We do have a strong business community in Edgewood,
but we have lost our Ford dealership, a restaurant, a realtor,
and some other small businesses.
It is important for rural America to keep these services
alive. Otherwise, we will only continue to lose population to
our larger cities. I truly believe rural communities are vital
to this country and are a great place to raise a family. But if
we are going to keep them and the small businesses in them
alive, then they will need the support from Congress and the
SBA.
I want to thank Congress for the steps taken to extend the
tax incentives to small businesses in the big beautiful tax
bill. Small businesses pour most of their earnings into growing
and improving their business. We do not see a return until we
sell or allow the next generation to take over.
I want to share some other thoughts on how to improve our
Ag business and our rural economy. Number one, encourage young
entrepreneurs, and give them the access to financing they need
to get their business started or to take over businesses that
their communities already rely on. We need to keep rural
America operating and be able to support our farmers.
Number two, invest and to support programs to improve, and
encourage businesses and people to stay in our rural
communities, especially those communities under 10,000 people.
In most cases, a lot of the basic infrastructure is in place or
can easily be improved if we just offered the communities and
small business owners the advice and support they need.
Number three, although not in this community's
jurisdiction, increased insurance support and stronger safety
nets for our farmers would go a long way to helping rural
communities they're a part of.
Number four, fair and reciprocal trade requests from those
countries we are purchasing goods and services from. My brother
and I also farm our family farm, and we sell our corn to all
three grain elevators in our community as they do business with
us. I think every farmer would rather have markets for their
products than rely on government payments, but we must make
sure those markets treat us fairly and that our trading
partners live up to the agreements they make with us.
One percent of our population are farmers. They produce
food for the rest of this great country and the world, and
create thousands of jobs in their communities from all the
support businesses required in their quest to feed the world.
I'm proud to be a farmer and an Ag business supporting farmers.
These are some ideas that I hope can be considered.
I greatly appreciate this opportunity to testify to this
committee, and look forward to any additional conversation.
[The prepared statement of Mr. Funke follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair. Thank you. And, finally, Ms. Moreira.
STATEMENT OF MS. MARIA MOREIRA, FOUNDER AND BOARD PRESIDENT,
WORLD FARMERS, LANCASTER, MASSACHUSETTS
Ms. Moreira. Thank you, Madam Chair Ernest, Ranking Member
Markey, and members of the committee. Thank you for the
opportunity to offer testimony for today's hearing, growing the
small business agriculture economy.
My name is Maria Moreira, and I am the founder and Board
Chair of World Farmers, a nonprofit which currently provides
access to land in technical assistance to 260 immigrant and
refugee farmers in Massachusetts. I am also the vice chair of
the Board of Rural Coalition, a national coalition with more
than 60 grassroots member organizations working to protect and
sustain land food in rural based here in Washington, DC.
In addition to the credentials you heard in my
introduction, I come to you today with 45 years of experience
in both creating and operating several successful food and farm
businesses, and supporting other farmers to build successful
farming businesses in this country, World Farmers' founding
mission is to support small scale vegetable producers in
accessing mainstream agricultural resources in developing
strong, viable businesses through technical assistance and land
access production and marketing.
Through all my years of dedicated to this work, the last
five years have been the most turbulent for farmers. Our
farmers are aging. Our shifting climate is imposing in creating
threats to farmers operations. Our farm labor is ever fragile
in our land. Prices are ever changing, changing markets posing
threats.
While farmers continue to receive pennies on the dollar for
their products, we are seeing businesses continue to
consolidate across sectors, and their market models are not
built to support new, beginning small to medium scale farmers.
This has made it increasingly difficult for small farm family
farms to sustain their operations, putting undue pressure on
them to increase scale in an attempt to compete.
We need to invest in our small to mid-size farms if we want
to see them not only survive but thrive. A local agricultural
sector stimulates job creation and supports economic activity
among adjacent and neighboring businesses. And yet, individuals
choosing to farm are dwindling, and farmers' children are first
witness to the scarce profit margins of finding other jobs.
In order to support the American people, we need to
intentionally prioritize and build a food system that
facilitates the development in growth of small to mid-scale
agriculture businesses. One of the most impactful programs for
facilitating the business growth among small and mid-scale
farmers across the country was the COVID-era policy that
channeled resources directly to farmers, and it did it in the
most effective way possible by purchasing their products.
This program originated under the Trump administration
named as the Farmers to Families Food Box Program, and evolved
into the local food purchasing assistance program known as
LFPA. We have not witnessed another single program that has
provided a similar level of direct financial impacts to small
and mid-size scale farmers.
World Farmers was a contract holder for the first Farmers
to Families Food Box Program. The first time that USDA
Agricultural Marketing Service, AMS, had sourced diversified
specialty crops from farmers. It was a big shift for the
agency, although many people I know said that the bid process
was not meant for small aggregators like world farmers.
We applied and we were awarded the contract, recognizing
the impact it would have for direct market farmers who did not
know if their markets would operate during the pandemic. This
program proved AMS's ability to source from small and mid-tier
aggregators who prioritize local farmers of scale.
It kept farmers afloat. The FPA and LFPA Plus programs did
similar things for farmers in Massachusetts. Of the 14.3
million invested in cooperative partners to implement the
program, 11.3 million was the food purchases made with local
farmers, fishermen, and producers. That's 80 percent of the
total budget direct directly invested in farmers products.
These programs showcase the capacity in success of the mid-tier
aggregators across the country and connecting with in advancing
sales for small and mid-scale farmers, as well as AMS's ability
to direct spending resources towards smaller producers.
In another way, which USDA can invest in our nation's
producers is through program outlined effective Food
Procurement Act, which we thank Senator Markey for developing
and introducing. This bill would shift USDA's significant
purchasing power to purchase from small to mid-sized producers,
prioritizing local sustainable and just purchasing with our
government contracts and sourcing just with the LFPA program.
This would support farmers by creating a market for their
products, recognizing the rising needs for farmers of all
scales across the nation. We hope that USDA, either of their
own accord or through congressional direction, will invest in
our farmers by investing in these programs.
Thank you for your time consideration of these in very
important matters in our support of growing the small business
agriculture economy. And I'm ready for the questions when they
come.
[The prepared statement of Ms. Moreira follows.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Chair. Wonderful. Thanks, Ms. Moreira. We will now move
into questions and answers, and I'll now recognize myself for
five minutes for questions.
So, we'll start with Ms. Spurgin. In your written
testimony, you state that, ``The path to greater rural bank
participation is reducing friction in the system.'' And on her
first day in office, SBA Administrator Loeffler noted that one
of her goals was to streamline and improve user experience.
I know that significant process has been made, and I expect
to see that continue under this administration. Can you walk us
through the process you went through the last time you tried to
utilize the 7(a) loan program, and how it can be made easier to
navigate through automation?
Ms. Spurgin. Yes. Thank you for the question, Senator.
Well, I will admit it has been five years since the last----
Chair. That's a problem.
Ms. Spurgin. Yes. Reason being, the last SBA loan that we
did took six months to close. It was the purchase of an
existing business that was so able to provide the historical
data points, the historical financials. It was a very well
positioned business. So, there's no reason it should have taken
six months to close.
And the other issue that we run into was the customer
burnout. And I'm not sure that ever gets referenced just in
regard to the back and forth that often happens between the SBA
application portal and the lender and the customer. So, it has
been some time since we have actually used the portal.
So, I would be very anxious for the small business
development centers and or local SBA offices to really start to
reach out to local lenders and describe the improvements.
Because it will take turning the boat from with small lenders
that have experienced the frustrations with that within that
system to start to try to reconsider using SBA programs.
Chair. So, when you're describing that customer burnout, it
is simply that it takes so long they go back and forth between
the portal or additional information----
Ms. Spurgin. Right. Or we submit something and then it's
something else. We need some additional documentation of some
kind or some additional projections. And so, that constant
customer thinks we're done, we've submitted it, we'll get a
response, and then it's, oh, we need something else. We need
something else. And that is a very long, and can be a very
stressful, timeframe for the customer.
Chair. Absolutely. No, thank you. I appreciate that. And
Mr. Funke, last year, Congress passed the Working Families Tax
Cut, which extended several small business tax breaks. And how
will those tax cuts help your business this upcoming tax
season, and what investments do you plan to make in your own
business?
Mr. Funke. Thank you for the question, Senator Ernst. First
off, the 20 percent deduction on qualified business income was
very helpful. And for a small business where we are investing
our profits back into our facilities, back into our people,
back into our equipment, it's important to have that.
In my own instance, the 100 percent bonus depreciation
along with a Section 179 was a great help to our business.
December is the biggest month of the year for sales in the farm
equipment businesses, and we were able to capitalize on that
and had one of our best year ends. We're very fortunate.
Yes, I talk about the farmers losing $200 an acre, but as
you're familiar, we are from a more of a livestock-oriented
farming in our northeast location. And it's been very helpful
to our business to minimize the reduction in our sales. So,
those two things have happened.
And for the record, two guys that did buy pieces, big
pieces of equipment at the end of the year, both moved it into
2026 business. So, the programs were good enough through the
manufacturers that they did that. So, you know most of our
sales at the end of the year were between 10 and $60,000. So,
you know, not big-ticket items. We didn't sell any big
tractors, a couple of combines, but that was about it.
As far as ourself the investments we've made, our biggest
one came a year ago when we opened up our addition onto our
facility. We added 10,000 square feet of shop space onto our
facility because our shop had been expanding. And that's one of
the things we've worked very strongly for the last several
years; to expand our shop, to be able to help our farmers and
keep them up and operating in those times when they need us in
the spring and the fall in particular.
And even right now, when they're in the winter, our
livestock guys need that skid loader to run every day. And
we're able to do that. But I've invested in crane hoists you
know, many different pieces of equipment replacing some
vehicles, and doing some of those things.
And there'll be more. But I will tell you that in 2026, at
this point, we're going to be very cautious moving forward.
Because we don't know where this price of commodities is going
to go. And it will trickle down and catch my livestock guys
eventually.
Chair. Thank you. My time has expired. But just because we
maybe have an audience and folks that may be viewing that don't
understand the cost of the type of farm equipment that we are
using in the Midwest, can you maybe just give the price of a
combine for those that are listening or watching?
Mr. Funke. I hope you're all having fun with this one. So,
certain combines are in the $700,000 to $800,000 for the base
unit. And then on top of that, if you're going to put a 12-row
corn head on it, that'll run you someplace in $150,000 to
$170,000. A 35-foot platform is going to run you well over
$100,000.
Now, my Ag-Co people with my Gleaner combines have done a
really strong job and they are trying to reduce the current
inventory. And we actually sold a brand new combine for true
cash price of, in the $430,000 range.
Chair. Yeah. So, I just use that to demonstrate, and thank
you, Mr. Funke. I just use that to demonstrate the cost
associated with equipment and farming today through the
Midwest. So, thank you for humoring me. I now recognize Ranking
Member Markey.
Senator Markey. Thank you, Madam Chair. In December, I
introduced the Effective Food Procurement Act to fix our broken
food federal contracting system. This bill would help more
small local producers that care about climate change and
sustainability and worker of fairness to get considered for
federal purchasing opportunities.
We just cannot continue to stick with the status quo of
rewarding massive agricultural corporations that are willing to
sacrifice worker safety and sustainability while leaving small
farmers on the sidelines. Small farmers are like beggars at the
banquet of federal subsidies. They don't get access to this
funding.
And federal contracting just shouldn't go to those same big
companies again, and again, almost like socialism that's built
into our system where the biggest get the most every single
time. If our government supports small businesses, we should
practice what we preach. Public purchasing dollars should
support the public good and lift up small producers.
So, Ms. Moreira, what can be done to help small producers
build sustainable food systems in their local communities, and
how would the Effective Food Procurement Act help? You
mentioned it in your opening statement.
Ms. Moreira. First of all, it's all about the markets,
access to the markets.
Senator Markey. Can you move the microphone over a little?
Ms. Moreira. First of all, it's all about the access to the
markets. Farmers and ranchers across the nation strongly prefer
investing to improve access to markets over direct farm
subsidies often accrue the most agribusiness and integrators
opening the markets, existing markets to localized farm family,
farm businesses in mid-tier aggregators who work with small
farmers.
By leveraging current investment in shifting procurement
practices through the Effective Food Procurement Act, it is a
critical step that would, which would adapt USDA's procurement
practices to establish a pipeline that future dependable,
stable markets for community connected and family operated
farmers simply by leveraging current investments in shifting
procurement practice by USDA. That's all we're asking.
Senator Markey. Yeah. Thank you. And again, a subsidy
program without access is an hallucination. That's where small
farmers are in America. They're just over here in some
hallucinatory state, you know, hoping someday that out of the
goodness and beneficence of the federal government, that
they'll stop just having socialized handouts to the biggest
companies.
So, Mr. Crowell, what is the role of cooperatives in
supporting resilient, sustainable, and localized food supply
chains?
Mr. Crowell. Thank you, Senator, for your leadership on
this issue, and particularly for including co-ops in this
legislation. Certainly, shifting federal purchasing priorities
towards small and mid-size family farms would make a big
difference, and it's an effective investment in our rural
communities and would expand markets.
But particularly by including co-ops, it would also
strengthen farmer-owned infrastructure in these communities
because these co-ops are owned and governed by their patrons or
the users of the products and services.
Their goal isn't to maximize profit, but to ensure that
they can meet their members' needs over time, whether that's
inputs, processing or marketing and distribution. And that
means that there's a built-in incentive for the cooperative to
stay rooted in its community, to weather economic and
environmental challenges and invest in long-term infrastructure
and impact.
By procuring from co-ops, you're also benefiting not just
one business, but all the members of that business, which in a
farmer co-op can be in the tens or it can be in the thousands.
So, it's a very efficient investment in rural America.
Senator Markey. So, talk about then the issues around SBA
lending and cooperatives.
Mr. Crowell. Thank you. Yeah. As I mentioned also, I'll
just mention briefly for food co-ops, you know, we're very
focused on local procurement, the average co-op purchases from
169 local farmers. But our growth is limited by personal
guarantee requirements in SBA loans, the lack of technical
support for people wanting to transition to the business model,
understand what it means to be a member owned co-op, and the
lack of strong interagency collaboration. So, those are the
basic changes we'd like to see, many of which are already
reflected in bipartisan legislation such as the Main Street
Employee Ownership Act.
Senator Markey. Yeah. Thank you. But again, legislation
without passages are hallucination. So, we have to work on a
bipartisan basis to get them passed. Thank you, Madam Chair.
Chair. Yeah, thank you. I just want to mention it's a topic
that we should be debating; the Effective Food Procurement Act.
It has been referred to the Agricultural Committee. It is not
under the purview of the Small Business Committee, but thank
you, Senator Markey.
And actually, Senator Husted, you are recognized for five
minutes.
Senator Husted. Thanks, Madam Chair. I've enjoyed the
conversation and listening. You know, having grown up in Ohio,
and in a farming community, and watching the industry over the
years and how innovation technology and globalization, all
these things have affected it.
I started to do a little math, having a little fun here
with my AI partner as I was going through the economics of a
family farm and reflecting on the estate tax debate that always
goes on around farms. And I was thinking about a large family
farm, 3,000 acres, row crops; wheat, corn, soybeans. I did the
math on this.
At $10,000 an acre, that's a $30 million asset. But once
you factor in average input costs and average yields, an
average net or price for what people would be yielding in those
crops over this sort of, this past three years, the estimate of
the net profit would be $81,153 a year, which is great. It's a
profit, but not much of one when you consider all the risk
that's involved in that. But if you would've taken that same
amount of value and invested in the S&P 500 this past year, it
would've netted you $4.9 million, and you could have sat home
the whole time.
So, I guess I'm not making a case for farming economically
speaking with that assessment. But I'm just trying to talk
about how important it is that we have people who are willing
to do this in our country, to feed America and people around
the world who don't have the ability to grow this kind of food,
and how important the estate tax exemptions that we put in the
bill and the Working Families Tax Cut plan this year really
were for that very example that I used.
Because the tax bill for that, were it not there, and you
wanted to pass it on to the next generation, would've been $12
million. And $12 million at an average net profit of $81,000 a
year, it would take you 147 years to pay that tax bill. And so,
when we make policies here with family farms in mind, and we
hear the rhetoric around the estate tax, it's just economics.
People won't stay in the family farming business if they can't
afford it, if they get charged a tax bill that they could never
pay.
And so, Ms. Spurgin, I appreciate you being here. And I,
I'm glad that you brought my friend Adam along with you as
former Secretary of State. But does that sound like the kind of
people that are the customers in your bank and the, the kind of
issues that they contemplate when they're making in financial
decisions?
Ms. Spurgin. Absolutely. And it's unfortunate that the
piece that is considered when a family farm is going to
transition is to sell the farm. And that's unfortunate.
Senator Husted. And what we did in the bill to help exempt
them from that tax bill, does it save family farms?
Ms. Spurgin. Yes, very much so.
Senator Husted. Thank you. Well, I'm glad to know that
because I think it's a virtuous goal, and I'm glad that we were
able to get that accomplished and sort of make the economic--at
least give a chance for the economics of this to work.
You talked about in your testimony, compliance burdens.
Could you talk a little bit more about that as it relates to
the how you, like, give us a flavor, if you could, about that
farmer, about that family farm. They come to you and they're
looking for financing. Explain what that compliance burden
means.
Ms. Spurgin. Yeah. So, you know, at the very basic level, a
lot of the requirements just at the very beginning in the
application side, when you're talking about business plans,
financial statements projections and especially for either
young borrowers or even new entrepreneurs into a new business,
that's really where we see the struggle is just having--you
know, they're all trying to do their work on a day-to-day
basis, but then to have this additional burden of not opposed
to providing projections or providing any of that.
It's the level of compliance that's required and the
constant. What seems to be a constant back and forth between
the application portal, and getting with the customer, and
having them be able to set aside the time that's required to
put this together. You know, so that's what we see from the
front end.
Also, compliance issues related just simply around once an
SBA loan is done around the guarantee where we have lived.
Unfortunately, not all businesses remain as ongoing entities
and have lived working through with SBA on the guarantee. And
it is not an easy process. Something that you do at the very
beginning that says you have a guarantee, and five years later,
you unfortunately have to go back on that guarantee with SBA.
And it is a very cumbersome process.
Unfortunately, the lender that did the loan that we did
five years ago, I asked him, I said have you ever talked to
anyone about an SBA loan? And he goes, I will never do one
again. And it was a good business. It was a purchase. It wasn't
even a startup. But, again, just the time that it took to close
the loan, six months, and the unfortunate side is the sellers
of existing businesses, they've got to be willing to stay
hooked with that buyer to be able to work through that
timeframe in that process. So, thank you for the question.
Senator Husted. Great. Thank you.
Chair. Yeah. Thank you. Senator Shaheen.
Senator Shaheen. Thank you, Madam Chair. One of the things
that I think is quite apparent listening to the testimony of
all of our witnesses, and the questions from you, Madam Chair,
and the ranking member, is that farming isn't the same all
across the country. And when SBA or USDA tries to make rules
that apply to farms, there's a really different ability for
farmers to be able to benefit from those programs.
And as Senator Markey pointed out, and the witnesses from
Massachusetts have pointed out, farming in New England is a
whole lot different than farming in Iowa and in New Hampshire.
We have a lot of small farms, a lot of organic farms and they
have not been able to take advantage of a lot of the programs
that are more available for larger farms.
And, Mr. Crowell, you talked about the federal food
programs that play an important role in providing a revenue
stream for businesses and food producers. We've seen that in
New Hampshire. We have one of the oldest food co-ops in the
country. I'm sure you're aware of the Hanover Food Co-op which
I think is the second oldest in the country.
And one of the things that's really helped that co-op and
the one in Littleton, which is a smaller community, is the
Local Food Purchase Assistance Cooperative Agreement program
that you mentioned, Ms. Maria. And one of the challenges is
that our federal agencies, like so much of our bureaucracy,
don't talk to each other.
And so, if we want to promote small business farming, then
we need to have SBA work with USDA. And what we saw with the
LFPA program is that it was terminated back in March by USDA
and what we lost in New Hampshire was $2.7 million to purchase
food from local farms. And while that doesn't sound like a lot,
if you're in Iowa or New York or California, that's a lot in
New Hampshire.
So, can you talk Mr. Crowell, about the consequences of the
losses of this kind of federal funding for our small, small
farms and what that means and how we should think about
encouraging cooperative agreements between federal agencies to
avoid this kind of problem in the future?
Mr. Crowell. Yes. Thank you, Senator Shaheen. And
especially for your support of our family farmers and food co-
ops in New Hampshire, as you mentioned our farms in the
northeast are quite unique. They tend to be much smaller, much
more diversified. They tend to be vulnerable to issues like
climate change because they're in very narrow river valleys.
And often the services coming from USDA aren't, aren't quite
appropriate. I mean, they're easily addressed, I think.
But it can be difficult for us and certainly for our food
co-ops working to sustain those local farms and prioritize
them. The support of the government has been very valuable and
obviously has a knock-on effect in our rural communities. One
key support has been the interagency working group on
cooperative development, as you're aware, which has
representation from across various departments and agencies.
We've seen renewed efforts during this Congress for SBA and
USDA to better cooperate, which would make a big difference for
us particularly on programs like disaster assistance. And I
think that the lending programs coming through better
collaboration through USDA and Rural Business Cooperative
Services would make a world of difference for our region. Thank
you.
Senator Shaheen. Thank you. And just to follow-up on that,
Ms. Spurgin, you've spoke eloquently about the challenges of
what wait times do for all small businesses, but I think it's a
particular problem for small family farms. And we've seen that,
again, especially with USDA and with some of the programs, the
REAP program, which helps with energy costs, which in New
England, as we know, is a big cost.
And we are very affected by climate change and what happens
to a business. We have four farms in New Hampshire that have
been waiting for more than a year for their REAP funding. What
happens to small businesses and farms when they have to wait
that long a time in order to know whether they're going to get
the funding they need to go forward with the project?
Ms. Spurgin. Thank you for the question, Senator. My
experience is they give up, which is, I think, unfortunate.
Senator Shaheen. Sadly, what we see. And so, thinking about
how this committee can better work with, since I'm on Ag
Approps, I can talk about the agriculture side, but how can we
better work with the agriculture authorizing committee to look
at some of the challenges as we want to promote our small
family farms? I hope that we can think about ways to do that.
Thank you, Madam Chair.
Chair. Yes. Thank you, Senator Shaheen. Senator Young.
Senator Young. Well, thank you, Chair, Ranking Member, for
holding this hearing. I think it's been really important. I
want to thank our witnesses for your testimony today.
Great state of Indiana, we have a lot of farms of course
associated with that. A lot of vibrant farm communities, and
some that have lost some of their vibrancy over the years. One
of the many challenges they're facing right now is they're
dealing with a silver tsunami. This is not unique to farm
country or to farm operations. But it can be especially acute
in some of our rural communities.
In fact, according to the U.S. Census Bureau, half of small
businesses are owned by individuals who will reach retirement
age within the next 10 years. When these farmers exit
agriculture without a clear exit strategy, a clear succession
plan, farms are often sold or consolidated. Young and beginning
farmers face especially high barriers to entry, and rural
communities lose jobs, lose population, and lose economic
activity.
Ms. Spurgin, what are the biggest barriers that young or
first-generation entrepreneurs tend to face when trying to
start a business, or take over an existing farm, or rural small
business?
Ms. Spurgin. Thank you for the question, Senator. From my
experience, that has been the cash down payment requirements.
Specifically, within the SBA programs, it's at least a 10
percent cash down payment. A lot of what we look at with
portfolio lending is the seller or however they're
transitioning out, that equity may be held and would typically
be land, buildings, other equipment. You know, so giving the
borrower value for that equity versus having it be all cash.
Senator Young. You have some related challenges in the
housing market that there've been some creative financial
instruments that I know are being structured to try and address
that. It's a little outside the scope of what I intend to ask
about, but thank you.
Is our existing SBA loan programs, in your mind, flexible
enough to help young farmers and entrepreneurs buy into
established operations rather than starting from scratch?
Ms. Spurgin. In lieu of the cash down payment requirements,
if it's an established business, I would say yes just because
the historical financials are there. So, you're able to have
some data to base your projections off of, but to start
something from scratch, I hate to know that the number of folks
that wouldn't qualify simply from that.
Senator Young. Yeah. Maybe that's something we take a look
at, see if the SBA programs could accommodate that. I'm going
to go ahead and open this up to Mr. Funke or our other
witnesses. Do you have anything to add on this topic of
succession planning and ways Congress maybe can soften the
impact to this challenge?
Mr. Funke. Yes, I do. In fact, if you noticed in my bio, I
listed that I'm only the sales manager there now. That says I
promoted my daughter to the general manager right before I
left.
Senator Young. I see.
Mr. Funke. So, yeah, that is a very important part. I am 67
years of age. I enjoy what I do. I'm not looking to get out
just yet, but I also know that we need to keep the younger
generation involved, and get them up there, and get them
running.
We have a small farm, in today's world. We are farming
roughly around 550 acres that my brother and I own. And then my
two sons, JC and Matt, help me and my brother with that farming
operation. And they just recently purchased 70 acres with help
through the USDA, the FSA program as beginning farmers.
I've had them working with us in the last 10 years to help
build up that, you know, ability to do something like that. It
is not something that you can do overnight, and the ability to
start into farming or any small business is going to require
the help of somebody that is willing to get them going, whether
it's, you know, in our business. You said 25 years. Del Clay
started in 1974, and it actually goes back to 1947 when it was
started by another individual.
Senator Young. So, Mr. Funke, having just gone through this
experience and being, you know, fairly versed in it, you
clearly took away because you just shared it with us that you
can't start right as you're looking to retire, but were there
program adjustments that you feel like would make it easier on
people like yourself trying to make this transition to the next
generation?
Mr. Funke. Absolutely. You know, for this next generation
to get going in the correct manner, they need to have some skin
in the game, and they need to be able to go out and borrow some
money. If all their money is coming from dad, or mom, or their
great uncle, that makes it more difficult to get these things
going.
But to Ms. Spurgin's comment that six months is too long
for these things to take, I've put together a lot of financing
for farmers, and the urgency of getting these things done
quickly through leasing, through longer-term financing with
other lenders is very important.
Chair. Yes. And we do have just a few minutes before we
close, if the rest of you would like to add comment as well,
Mr. Crowell.
Mr. Crowell. Sure. Thank you. Yeah, this is another area
business succession that co-ops can play a key difference. But
there's not the technical support out there from SBA to
communicate to business owners that option, what it might look
like, how to become a cooperative.
We have examples of things like farm supply businesses
hardware stores that have converted to cooperative structures
and therefore remained in the community. And then on the food
co-op side, changing these personal guarantee requirements
could free food co-ops to expand their purchases of local
goods.
As I mentioned, on average, food co-ops buy from 169 local
producers. They're also often areas where new farmers can try
new products. They're willing to experiment with new products
and services. And you see many examples of local farmers that
started just selling to their local food co-op and now are
large businesses distributing to major buyers.
Senator Young. Great.
Chair. And, Ms. Moreira, did you have any comments?
Ms. Moreira. Yes. I just wanted before closing to focus on
the LFPA, and the need for the LFPA program for small farmers.
And during the last one year, we serviced 500--we purchased
aggregate from 500 farmers, small farmers in Massachusetts, in
New England.
And the effects of the cancellation in March was
devastating. In March, farmers had already purchased their
seeds. They had already started their seedlings. All of the
planning for the season has already been done. They had already
invested in all of the system of doing their crops this season.
So, finding a market at that point, the food finding a
market was next to impossible. So, we did the best we could.
All farmers that were part of the program did the best they
could, but crops were left in the field unsold. So, that's
really, really, really important for us to know how important
that program is, still is, in how devastating the cancellation
of it was. I could go on, you know, but I think my time is up.
Thank you.
Chair. Thank you. Yes, we appreciate the comments today.
Senator Markey. Just ask one quick question, if I may.
Chair. Yeah, of course.
Senator Markey. Yeah. Thank you. I went to the farm in
Ireland that my grandmother had to leave because the succession
program in Ireland was the oldest gets the farm and everyone
else moves to America. So, I went to the farm just to see, and
this woman is like the twin of my mother, but my mother was--
you know, that part of the family, it was down the food chain.
So, they all had to come to Boston. And a beautiful farm.
You know, I could see just that birth order might have changed
my whole history in terms of what the succession plan was. And
then, my father was a milkman, so he took us up to Beverly
Farms to see where the milk came from the cows, and then he
would be delivering the milk. So, we moved to the retail side
of farming in one generation. And so, that's my relationship
with it.
And, Mr. Crowell, I'd just like to know what did the cuts
in the SNAP program's supplemental nutrition program, what
impact did that have on small farmers across Massachusetts, but
across New England, and the country?
Mr. Crowell. Yes. Thank you for the question. I think
really that the challenge around the cuts to SNAP benefits,
obviously, it has a deep impact on food security, particularly
in rural areas. But it also has a knock-on effect. What it
meant was people with limited incomes had less money to spend
on healthy food and groceries, which means sales would go down
for the food co-op, which meant that the co-op couldn't buy as
much product from, from local farmers.
So, I think when we think about how these benefits impact
not just individuals, families on limited incomes, we have to
think about them more systemically as well and understand that
they are part of a more sustainable and fair food system that
can keep people well fed and healthy over time.
Senator Markey. Okay. Great. Thank you, Madam Chair.
Chair. Wonderful. Well, again, I do want to thank our
witnesses for being here today. I ask unanimous consent that
the record of today's hearing remain open for two weeks for
members to submit questions, revise and extend their remarks,
and submit additional information into the record. Without
objection, so ordered.
And again, thank you very much for this important committee
meeting today. And with that, the Committee on Small Business
and Entrepreneurship stands adjourned.
[Whereupon, at 3:42 p.m., the hearing was adjourned.]
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