‘Farm Protection Act’ Provides Needed Assurance to Producers

The only certainty upon which Arkansas’ First District agricultural producers can rely is the uncertainty they face year to year. Summer droughts commonly scorch crops and livestock while spring floods inundate young stands and pastures. Diseases and insects can dash dreams of a promising harvest. Input costs may skyrocket. And unpredictable markets may force farm product prices to plummet, requiring producers to have a stellar harvest just to break even.

With all the risks associated with production agriculture, any time farmers can add a little assurance to their operations, they do it. In fact, one of the main jobs of a modern farmer is to minimize risk.

But they can never eliminate it.

The collapse of Turner Grain Merchandising, Inc. in Brinkley is a prime example of the unforeseen hazards facing agricultural producers. Customers of Turner — who thought they were minimizing risk by selling their crop to the merchandiser — were left with no guaranteed source of income for crops they’ve already harvested or had yet to harvest.

To make matters worse, many of the producers had secured Commodity Credit Corporation loans through the U.S. Department of Agriculture’s Farm Service Agency (FSA). These loans had a fast-approaching repayment schedule, and growers had no way to pay them back.

My Arkansas delegation colleagues and I immediately saw the need to provide some relief to producers facing loan defaults with the Federal Government. We requested that FSA provide growers involved with Turner a 180-day loan extension and that FSA revisit the situation after 180 days to determine if producers need additional time. U.S. Agriculture Secretary Tom Vilsack responded with a total extension of only half our requested time, forcing us to act immediately.

Following our letter, I introduced legislation aimed at protecting farmers when a grain buyer goes bankrupt. This legislation, known as H.R. 5542, or the Farm Protection Act of 2014, protects growers from making payments on a loan when they are a creditor in a grain buyer bankruptcy until after the bankruptcy is resolved and the farmer receives payment from the bankruptcy estate.

Sadly, bankruptcy cases often take months or years to fully resolve. Armed with this knowledge, the Farm Protection Act requires USDA and FSA to automatically extend the terms of the agency’s market access, ownership, operating, or emergency loans for a farmer caught in a grain buyer’s bankruptcy until 180 days after that bankruptcy case resolves.

I appreciate my Arkansas House delegation colleagues signing on as co-sponsors to the Farm Protection Act, and I’m glad to see Arkansas’ Senate delegation introducing similar legislation. I look forward to progress on our legislation and pursuing a compromise in the coming months. More importantly, however, I look forward to providing some needed assurance to First District agricultural producers.

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