Ag Bank Mergers Exacerbate the New Farm Crisis

Not only is Big Ag a very sick system of growing food for the planet, it is very bad for farmers as well.  While access to operating loans keeps them in business doing the same old bad practises and thus it is hard to sympathize, it nonetheless keeps them out of bankruptcy.  If there are no farmer -- only slave labor -- there will be no farms or farmers or rural culture to convert to best practice. They need loans despite our differences and then they need access to organic and soil building technology to transition to sustainable farming. This article from Food & Power

Last year, the Nebraska Rural Response Hotline, which connects farmers and ranchers with legal, financial, and mental health services, set four monthly records for the number of new callers in financial distress. This spike reflects the broader hardship facing rural Americans in the midst of what some are calling the new farm crisis. 

The crisis has many causes, including falling commodity prices and the rising cost of farm inputs like seed and fertilizer. But another contributing factor that is already making the consequences of these deteriorating fundamentals far more severe is the massive consolidation of ag lenders that has occurred since the last farm crisis in the 1980s. 

Grain and dairy farmers, in particular, depend on annual operating loans, which can be more than $1 million dollars, to pay for their upfront costs. But according to Joe Schroeder, an advocate with Farm Aid who takes calls from farmers in crisis, “it’s getting tighter and tighter across the board for people depending on operating loans,” to the point where accessing credit “becomes an annual nightmare.” 

Farmers are finding it harder to get new loans due to their declining income and mounting debt. But another cause is the displacement of local agriculture banks by large distant lenders with which farmers have no personal relationships. 

“So many banks have consolidated that the local bank is not locally owned, it’s just a branch of another bank,” says Vern Jantzen, Vice President of the Nebraska Farmers Union. “In the old days there was a relationship there, the banker knew how this family was operating and he could figure out if this is a good risk or not, but all of that is gone.”  Posted by Claire Kelloway in Commodities, Grains, Mergers & Acquisitions, Newsletter

http://www.foodandpower.net/2018/08/16/ag-bank-mergers-exacerbate-the-new-farm-crisis/