One of the top points of discussion at this year’s American Bankers Association Ag Bankers Conference was the 2023 Farm Bill.  You may ask yourself, why do bankers care about the farm bill.  Ed Elfmann, Senior Vice President for Ag and Rural Banking Policy at the ABA says despite what many think, a large portion of the banking industry is connected to rural America, and the Farm Bill has a direct impact on those local economies.


“But there's eleven titles in the Farm Bill, and I think we care about ten of themRight?  We care about rural development, we care about the conservation programs, we care about the credit, there's a credit title on the Farm Bill.  A lot of people don't even realize that, [so we] care about the credit title what happens there.”


When it comes to the production side of the Farm Bill, Elfmann said there are several issues bankers are watching for next year.  He noted while bankers don't necessarily advocate for direct payments, or ARC or PLC, they look at how decisions made in the Farm Bill will impact lenders.


"I always jokingly say with my folks we're like the third person to be hit by this thing.  Because if you change a commodity program and it changes the customers cash flow then that affects us bankers.  So, it's a weird spot to be for me because I'm not actually talking about one particular thing I have to look at unintended and intended consequences."


One of the biggest things the banking industry will advocate for, Elfmann said was crop insurance.  He added they are also be supporters of the dairy insurance programs.  Then then there’s the credit title in the Farm Bill.


"That's where you see the FSA guaranteed loan programs, and a lot of our lenders participate in the guaranteed loan programs because it's a way to either get beginning farmers in and have them be able to acquire some credit they might not otherwise be able to acquire.  Or you might have somebody who has a dip in their operation and they need to use the programs that's a way to carry them through and make sure that they're still in a good place.  So we're big supporters of the guaranteed loan programs.  We haven't picked a number yet but we do believe the programs need to get bigger the lending limit is about $1.88 million, we'd like to see that get over the $2 million mark, partly because farms are getting bigger.”


Elfmann added rural bankers also use the Rural Development programs quite a bit, for a variety of on-farm, as well as off-farm efforts, that better small-town communities.


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