For Immediate Release
February 23, 2017
ABA Media Contact: Sarah Grano
(202) 663-5470
Email: sgrano@aba.com
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ABA Testimony Provides Perspective on 2018 Farm Bill

​WASHINGTON — The American Bankers Association testified today before the Senate Agriculture, Nutrition and Forestry Committee, offering the banking industry’s perspective on the current Farm Bill, its impact on agricultural lending and necessary changes in the 2018 Farm Bill. The field hearing, conducted by Chairman Pat Roberts and Ranking Member Debbie Stabenow, was held at Kansas State University in Manhattan, Kan.
 
Shan Hanes, president and CEO of First National Bank in Elkhart, Kan. testified on behalf of ABA. First National Bank is a $78 million bank with 21 employees, and despite the bank’s small size, it is the largest lender in the county. Hanes is also a member of ABA’s Agricultural and Rural Bankers Committee.
 
In his testimony, Hanes conveyed the vital role banks play in the agricultural economy as a primary source of credit to the nation’s farmers and ranchers.
 
“Agriculture is a vital industry to our country, and financing it is an essential business for many banks, mine included,” said Hanes.

He also discussed the successes of the 2014 Farm Bill including the support of crop insurance, the conservation reserve program and the removal of term limits on USDA Guaranteed Farm Loan Programs.
 
He expressed concerns, though, on other aspects of the guaranteed farm loan programs.
 
“There is a need to consider reforms to the programs, specifically to raise the lending limit cap on guaranteed ownership and guaranteed operating loans due to the rising cost of agriculture,” Hanes said. “Additionally, there needs to be a more in-depth discussion on modernizing the programs and providing means for something as simple as electronic signatures.”
 
Hanes also suggested changes to the Agricultural Risk Coverage and Price Loss Coverage programs.
 
“With the significant changes we’ve seen in commodity prices, producers need to have the ability to make elections to their ARC and PLC farm programs yearly instead of a one-time election,” said Hanes. “Lastly, and most importantly, farmers currently do not receive their payments in the same marketing year. This has caused an issue for lenders as we cannot properly account for their payments as part of their loan repayment strategy.”
 
 Hanes expressed concern about the growing size, complexity and tax advantages of the Farm Credit System – a government-sponsored enterprise like Fannie Mae and Freddie Mac – and the risks it poses to American taxpayers.
 
“The most troublesome competitor I face is the taxpayer-backed and tax-advantaged federal Farm Credit System,” he said. “Congress created the FCS as a public option for farm finance 100 years ago when farmers were having trouble getting the credit they needed. Those conditions no longer exist, and yet we continue to have a government assisted, tax advantaged farm lender providing credit to customers who would be able to easily borrow from taxpaying institutions like mine.”
 
Click here for a copy of Hanes’ full testimony.
 
The American Bankers Association is the voice of the nation’s $17 trillion banking industry, which is composed of small, regional and large banks that together employ more than 2 million people, safeguard $13 trillion in deposits and extend more than $9 trillion in loans.
 
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