Note: This is the first in a series examining the Farm Credit Administration’s (FCA) responses to questions submitted for the record by members of the House Committee on Agriculture following its oversight hearing of the Farm Credit System (FCS) in December 2015.
The past 10 years have seen the FCS’s investment in young and beginning farmers stagnate, while loans to small farmers have dropped surely and steadily. But the FCS and the FCA aren’t the only ones who are supposed to focus on small farmers – the USDA does as well. Don’t you think it would be reasonable to assume that both of these agencies define small farms by the same criteria?
Sometimes reason and the FCA don’t go hand in hand.
This became clear once the FCA started actually submitting answers to the House Committee on Agriculture’s questions. One question really puts the microscope close, focusing on the nitty gritty details that the FCA so often overlooks:
Question 13: From 1998 to 2013, the USDA defined small farms as those farms with gross sales less than $250,000. In 2013 the USDA raised the cutoff to $350,000 to better reflect price increases for farm commodities. According to the FCA’s 2014 annual report, the FCA still uses the old cutoff. Why is the FCA using the more limited threshold and how many small farmers might be left out as a result?
Answer: FCA has formed a workgroup that is studying whether we should adopt USDA’s Economic Research Service’s new threshold of $350,000.
Nearly three years after the USDA made its change in the definition of small farmers (and who better to know about farm size and economic changes than the agency specializing in agriculture), the FCA is only now creating a “workgroup”? Who will be on this workgroup? When will it produce results and make a final decision? Is this an ad hoc workgroup or a permanent workgroup? Will the final decision be reviewed and adjusted for inflation or a change in commodity prices? Will the workgroup determine how many small farmers the FCS failed to offer its programs to?
America’s small farmers deserve better from the FCA. The FCA has shown that it isn’t willing or able to carry out minimal oversight of the FCS. For nearly three years it’s left the definition of a small farmer unchanged, allowing the FCS to avoid serving a significant portion of those it’s supposed to serve. Until the FCA can show that it’s able to administer its own programs effectively, both the House and the Senate need to keep a watchful eye to make sure it doesn’t wander off again.