- Editor's Note -
Backbone of the industry stands strong, supports ag
| By Carroll Smith|
Although ag journalism wears many hats these days – magazines, television, radio, Web sites, Twitter, Facebook and blogs – the ink and the chatter predominately target topics that pertain to producing, processing and marketing the crop.
But, often, the backbone of the agriculture industry that makes any, if not all, of this happen is the ag banker – men and women who put their money where the crops are. Without their support, production information would be a moot point for many farmers because they wouldn’t have the financial wherewithal to put the first seed in the ground.
I was reminded of the importance of this group after reading an excerpt from the American Bankers Association (ABA) Ag Banker newsletter. According to the release, Donnie Winters, president and CEO of Farm Credit Services of Mid-America, Louisville, Ky., made remarks in December charging that banks have “basically left” the agricultural lending market. ABA Agricultural and Rural Bankers committee chairman Curt Covington disagreed.
“Despite a very…challenging agriculture economy, banks increased their farm loans by $4.7 billion over the past 12 months,” Covington said. “If we look at the growth of agricultural loans from the end of the third quarter 2004 to the end of the third quarter of this year (2009), banks have increased agricultural lending by $40.6 billion over the past five years.”
He added that, despite Winters’ claim to the contrary, banks finance more small and start-up farmers and ranchers than anyone. “As of June 30, banks had over 950,000 individual farm loans of less than $100,000 on their books...[and] more than half of all the farm and ranch loans on the books of all of the banks in this country as of June 30 were for less than $500,000, which today is a small farm or ranch loan,” Covington said. “Mr. Winters’ claim that banks have ‘basically left the market’...just isn’t supported by the facts.”
It appears that the financial backbone of the ag industry emerged from the background and into the spotlight to set the record straight via Covington’s comeback to Winters’ comments. We all know good production information is an important element in the success factor, but let’s also remember the significance of the institutions that are willing to “take one for the farmer” on the financial risk side of the equation.
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