House Ag Studies Declining Farm Economy

This week, the House Agriculture Committee held a hearing on the declining condition of the farm economy.

Witnesses reported that high input costs are squeezing margins, and a more expansive farm safety net may be required in the next Farm Bill.

[Rep. David Scott, D - GA] “The 2024 Equity Commission Final Report shared that previous attempts to strengthen the safety net did not directly translate to addressing disparity among producers. So will you tell us more about this disconnect?

[Ronald Rainey, University of Arkansas] “I would I would echo that agriculture is extremely important to our rural communities, but it's important to our urban communities as well. I perceive food insecurity across the country. And what Covid taught us in many ways is that our our farming communities are a source, a resiliency for for making community and areas food secure, even sometimes replacing some of our, our large scale commercial commodity systems that are in place, going from the small farmers that are doing direct marketing at farmers markets or using the local regional food systems. So the way it plays is that across the spectrum of businesses that make up agriculture, a lot of the, the, the, the farming groups, that aren't able to actively access programs to, to to be thriving, become efficient is to be creates an added hurdle.”

[Rep. Abigail Spanberger, D - VA] “Could you discuss about the current state of farm safety programs that have affected agricultural lenders and their ability to support farmers?”

[Tony Hotchkiss, American Bankers Association] “From a safety net perspective, obviously, crop insurance, I believe, is critical. It's part of the farm bill. It's critical both for the farmer and benefits. greatly because it allows them to, to gain access to credit. But it also, does give the, the, the organization financing them also some comfort because, they do have that safety net there. Reference prices have historically been set once in a farm bill, and I believe with with our economy and our world moving at such a rapid pace, almost an annual setting of those reference prices makes more sense because you avoid getting getting them out of out of correlation with what's going on in the market.  And I also believe that that having a correlation to the cost to produce versus the market is really important because, there isn't always a strong correlation between that cost to produce and the market price versus, what a reference price could do from a safety net perspective. And as has been said by some of my esteemed colleagues here, it's important that I believe it's important that farmers can at least break even.”

[Rep. Jahana Hayes, D - CT] “What have you identified as the main barriers to access to crop insurance for small farms?

[Ronald Rainey, University of Arkansas] “We're actually trying to address that question and are collecting data actively right now, trying to, one understand, just the basic awareness of federal crop insurance. One of the things that we found out through that, that program where we have a cohort of program specialists talking to farmers and ranchers, and I'll preface it by saying we're focusing on socially disadvantaged, marginalized farmers, small farmers is asking them, are they familiar with what the federal crop insurance products are? And and so from a fundamental risk management perspective, many of our small and minority farmers don't even understand the value of of how they can transfer and manage risk using federal crop insurance.”

For Market to Market, I’m Peter Tubbs.