National Farmers Union President Roger Johnson today encouraged the U.S. Department of Agriculture (USDA) to prepare for increased economic instability and financial stress for American family farmers and ranchers through the USDA Certified Agricultural Mediation Program.
“USDA’s August 2015 net farm income forecast confirms anecdotal evidence of increasing financial distress for producers,” noted Johnson in a letter to U.S. Secretary of Agriculture Tom Vilsack. “NFU encourages USDA to prepare for increased activity of direct and guaranteed loan applications, loan servicing and mediation services. We recommend the USDA utilize the USDA Certified Agricultural Mediation Program and expand the agricultural issues that are eligible for mediation services.”
Johnson noted that after several years of strong and record high net farm incomes, production costs also enjoyed an upward income trend. Johnson noted NFU’s strong support for the USDA Certified Agricultural Mediation Program which helps producers and lenders agree on solutions to conflicts with farm loans.
“The projected 36 percent decrease in net farm income with expenses projected to drop only 0.5 percent is certain to cause significant financial distress, particularly among beginning and financially leveraged producers,” he said. “National Farmers Union has received reports of difficulties in obtaining operating loans, spikes in ‘Hotline’ calls regarding financial stress and concerns of loan repayments following the 2015 harvest.”
“We recommend that USDA work with the state mediation programs to assess the adequacy of state program grant funds for preparation and delivery of the likely increased workload of credit related mediation services,” said Johnson.
Johnson also noted that NFU supports the expansion of agricultural issues eligible for mediation that ultimately affect the financial viability of family agricultural operations. “Any type of dispute or disagreement exacerbates financial distress when cash flows are tight or non-existent,” he said.