Article Appeared in Jan. Edition of The Sugar Producer Magazine
Jack CassidyAmerica’s farmers and ranchers aren’t the only ones that have a lot riding on the outcome of the next farm bill. Input providers, small businesses on Main Street, and rural communities dependent on agriculture’s tax dollars and jobs will all have a lot at stake when Congress takes up the farm bill in 2007.
As a leading lender to farmer-owned cooperatives and other businesses in small towns across the country, CoBank is keeping a watchful eye on this important debate. And it’s our hope that when sugar is discussed, Congress will have the foresight to continue the current sugar policy, which has worked so well for America.
CoBank is the largest lender to sugar processors in the country, and a strong sugar program gives banks like ours confidence when lending money to the nation’s sugar industry.
The program has a proven track record of success, and it has brought stability and prosperity to many rural areas.
Weakening this policy or changing to an unproven system would undoubtedly affect our customers’ ability to repay loans. This could jeopardize the 146,000 U.S. jobs that sugar helps support and could send economic shockwaves through sugar-producing towns in 19 states.
We’re not alone in this fear; commercial banks and our colleagues within the Farm Credit System have voiced similar concerns.
Members of the lending community that service the South are particularly worried about the effect a sugar policy shift could have on hurricane recovery efforts in Louisiana and Florida.
In a July letter to the House and Senate Agriculture Committees, First South Farm Credit wrote: “South Louisiana is economically dependent on sugar and cannot withstand an unproven change in sugar policy that would continue to add to the economic devastation along with hurricanes Katrina and Rita.”
CoBank is likewise worried about the effects in the Midwest where droughts and other weather-related disasters have taken a toll. 2005 was a difficult year for a lot of beet growers, and the rising fuel prices of the past year have only added to the pressure.
The last thing these farmers can afford now is to have Congress pull the rug out from under them by scrapping the successful sugar program as many large food manufacturers are advocating.
Luckily, the House and Senate Agriculture Committees have been big supporters of U.S. sugar policy in the past, and CoBank hopes that support will continue.
Throughout this farm bill debate, sugar farmers and processors should know that their bankers will be by their side to promote a continuation of the existing no-cost program.
Our customers can rest assured that CoBank will be at the forefront in reminding the nation’s lawmakers that a vote to renew the sugar program is a vote to give small-town America the economic tools and stability it needs to thrive.
About the author:
Jack Cassidy is senior vice president of corporate relations for Denver-based CoBank, one of America’s biggest and oldest lenders to the sugar industry.