Farmers warn US parliamentarians about rural economic crisis

A panel made up of farmers, retailers and bankers has warned US lawmakers of a looming rural economic decline and called for urgent passage of a new farm bill. At a hearing yesterday at the House of Representatives Agriculture Committee, experts highlighted rising production costs and interest rates, combined with historically low commodity prices, which are pushing farmers into dangerous levels of debt.

Dana Allen-Tully, president of the Minnesota Corn Growers Association, emphasized that the situation could become unsustainable by 2025, when many farmers may not be able to get loans due to a lack of cash flow. Allen-Tully highlighted that agricultural income, adjusted for inflation, is expected to fall 27% between 2023 and 2024. Additionally, production costs are expected to reach $455,1 billion this year, an increase of 3,8%.

"We have to have policies in place that reflect the realities of agriculture today. The risks in agriculture are incredibly high. We are putting everything we have at risk every year by very small and often negative margins. Is it any wonder then that the age average farmer is approaching 60 years old?", said Dana.

Bankers have supported farmers in refinancing their debts, but the continuation of this practice is at risk due to low commodity prices. Tony Hotchkiss, chairman of the American Bankers Association's Agricultural and Rural Bankers Committee, said total farm debt is expected to reach $547,6 billion in 2024, a 40% increase since 2017.

In turn, Ronald Rainey, from the University of Arkansas, reinforced that input prices above commodity prices require an improved safety net. David Dunlow, a cotton farmer, warned that without the support of a new bill, many farmers could stop producing.

The House Agriculture Committee advanced a $1,5 trillion bill in May, including benchmark price increases and crop insurance modifications, but there is still no floor action planned. Disagreements between the House and Senate, especially over funding parameters, continue to hamper progress.

Glenn Thompson, chairman of the House Agriculture Committee, and Senator Debbie Stabenow, the Senate sponsor of the bill, are at odds over the proposed changes, making it difficult to negotiate a unified bill.