The lagging farm economy was a top focus today for the House Agriculture Subcommittee on General Farm Commodities and Risk Management. National Farmers Union (NFU) President Roger Johnson joined a panel of industry leaders to testify on behalf of NFU’s nearly 200,000 members who are currently facing a diverse set of challenges in the farm sector.
“As commodity prices continue to decline and farmers and ranchers struggle to adjust to lower prices, there is a growing burden felt by producers out in the countryside,” Johnson informed members of the committee. “Even more worrisome is the U.S. Department of Agriculture forecasts, which show a prolonged period of low commodity prices. This situation will result in trouble accessing credit, negative farm budgets, depressed markets and tests to the farm safety net.”
The downturned farm economy has put a significant strain on farm financials, Johnson explained. “We are seeing this manifest itself in the Farm Service Agency’s loan portfolio, an early indication of challenges ahead,” he said.
“Local lenders are concerned that with high yields being necessary to protect from low prices, weather-induced yield losses will exacerbate an already difficult situation. One thing that my local lenders wanted to drive home to members of this committee is the importance of a strong safety net,” he stated, underscoring the importance of critical farm programs, like crop insurance and other safety net programs.
While Johnson felt that, overall, commodity programs are functioning as designed and assisting producers through challenging times, he did acknowledge several programs that need thoughtful attention today and others that would benefit from additional changes in the next Farm Bill. Specifically, he mentioned the Agricultural Risk Coverage program, Price Loss Coverage program, Dairy Margin Protection Program, and the Stacked Income Protection Plan.
Exploring bright spots in the farm economy, Johnson highlighted the organic and local food sector, which has grown by nearly 300 percent since 2002. He noted that these sectors seem to be less subject to the falling commodity prices.
Concluding his remarks, Johnson encouraged members of the committee to consider the state of the farm economy and the challenges facing family farmers and ranchers as they work through the next Farm Bill process.
“This committee has a challenging task ahead of it as it begins to grapple with these problems especially as it looks to crafting the next farm bill. Our collective challenge is to continue working to provide help when and where needed and to encourage the continued growth and success of our most vital industry – agriculture,” he said.
In March, NFU released a Farm Bill survey to gain a greater understanding of the effectiveness of the 2014 Farm Bill programs and identify the organization’s advocacy priorities for the next Farm Bill process. Family farmers and ranchers are invited to complete the survey, available online, before July 31, 2016.
Johnson’s testimony can be read in full here.