The Farm Bill is a large piece of legislation that, every five years, updates the federal government’s agricultural policy. And this year, the House and the Senate are working on their own versions of the Farm Bill, keeping good policy, getting rid of bad policy, and making improvements along the way.
The House’s Farm Bill has stalled for now. But the Senate’s version has been introduced and has been approved by the Senate Agriculture Committee. And it’s clear that the Senate wants to improve the Farm Credit System (FCS) to make sure it’s secure, accountable and reliable.
There are three major provisions included in the Senate’s Farm Bill that make sure Farm Credit can do what it’s supposed to do:
1. Security: This section empowers the Farm Credit System Insurance Corporation (FCSIC), Farm Credit’s insurer, to act as conservator or receiver of a Farm Credit bank or association. So what will that mean? If a Farm Credit institution fails, and cannot pay its debts, the FCSIC will step in to assume control of the institution and see it through its crisis. This is an important power, and it’s crucial to prevent a systemic collapse in the event that a Farm Credit institution fails. But it does bring up an important question: are lawmakers concerned that the System isn’t sound?
2. Accountability: This provision would institute an industry-wide prohibition on hiring FCS employees that have “been removed or suspended from office.” So, any FCS employee that commits wrongdoing (perhaps authorizing an improper loan or attempting to defraud the government) would be prevented from working for a whole slew of other financial institutions. This is a step in the right direction, and it suggests that lawmakers understand the importance of enforcement, and want the Farm Credit Administration (FCA) – the FCS’s regulator – to crack down.
3. Reliability: The System has always had trouble making good on its promise and duty to support young, beginning and small farmers. The Senate seems to recognize this, and is getting at the heart of the issue: Farm Credit isn’t helping socially disadvantaged farmers, ranchers and producers, no matter whether they’re young, beginning or small. This new provision will compel Farm Credit to help those who need help the most.
The Senate’s Farm Bill is ambitious and committed to making the FCS more secure, more accountable and more reliable. The Reform Farm Credit team congratulates and thanks the Senate Agriculture Committee for returning the FCS to its true mission and for supporting America’s farmers, ranchers and producers. There’s a long way to go before this process is through, and this is an excellent start.