Every five years, Congress revisits the federal government’s agricultural policy. The House has passed its version of the Farm Bill already, and Reform Farm Credit is proud to congratulate the Senate on passing its own version as well!
The Senate deserves huge credit for this Farm Bill because it holds the Farm Credit System (FCS) accountable and makes it more secure and reliable.
The Senate’s Farm Bill has three important provisions that will strengthen the FCS and protect America’s taxpayers – they ensure security, accountability and reliability.
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? They should be. This is an important step in the right direction, though more safeguards are needed.
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. Lawmakers understand the importance of enforcement, and want the Farm Credit Administration (FCA) – the FCS’s regulator – to crack down.
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 a major improvement to federal agricultural policy, and the Senate deserves huge credit for it. Now, the Senate and House must work in conference to resolve the differences between their bills. Reform Farm Credit strongly advocates for the final bill to not include the House’s proposal to lift the cap on FCS bank director compensation, and include the Senate’s measures to make the FCS more secure, accountable and reliable. With those measures in place, American agriculture will be one step closer to truly thriving. Thank you Senators – especially the Senate Agriculture Committee – for your hard work in advancing an excellent Farm Bill!