S.Hrg.119-31

1[Senate Hearing 119-31]2[From the U.S. Government Publishing Office]34                                                         S. Hrg. 119-3156                      PERSPECTIVES FROM THE FIELD:7                   RISK MANAGEMENT, CREDIT, AND RURAL8                   BUSINESS VIEWS ON THE AGRICULTURAL9                            ECONOMY, PART 31011=======================================================================1213                                HEARING1415                               BEFORE THE1617                       COMMITTEE ON AGRICULTURE,18                        NUTRITION, AND FORESTRY1920                          UNITED STATES SENATE2122                    ONE HUNDRED NINETEENTH CONGRESS2324                             FIRST SESSION2526                               __________2728                             March 11, 20252930                               __________3132                       Printed for the use of the33           Committee on Agriculture, Nutrition, and Forestry3435[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3637                  Available on http://www.govinfo.gov/3839                               __________4041                   U.S. GOVERNMENT PUBLISHING OFFICE4259-707 PDF                  WASHINGTON : 20254344-----------------------------------------------------------------------------------4546           COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY4748                    JOHN BOOZMAN, Arkansas, Chairman49MITCH McCONNELL, Kentucky            AMY KLOBUCHAR, Minnesota50JOHN HOEVEN, North Dakota            MICHAEL F. BENNET, Colorado51JONI ERNST, Iowa                     TINA SMITH, Minnesota52CINDY HYDE-SMITH, Mississippi        RICHARD J. DURBIN, Illinois53ROGER MARSHALL, Kansas               CORY BOOKER, New Jersey54TOMMY TUBERVILLE, Alabama            BEN RAY LUJAN, New Mexico55JAMES C. JUSTICE, West Virginia      RAPHAEL WARNOCK, Georgia56CHARLES GRASSLEY, Iowa               PETER WELCH, Vermont57JOHN THUNE, South Dakota             JOHN FETTERMAN, Pennsylvania58DEB FISCHER, Nebraska                ADAM SCHIFF, California59JERRY MORAN, Kansas                  ELISSA SLOTKIN, Michigan6061               Fitzhugh Elder IV, Majority Staff Director62                Caleb Crosswhite, Majority Chief Counsel63                    Jessica L. Williams, Chief Clerk64                Lauren Santabar, Minority Staff Director65                 Chu-Yuan Hwang, Minority Chief Counsel6667                            C O N T E N T S6869                              ----------7071                        Tuesday, March 11, 20257273                                                                   Page7475Hearing:7677Perspectives From the Field: Risk Management, Credit, and Rural78  Business Views on the Agricultural Economy, Part 3.............     17980                              ----------8182                    STATEMENTS PRESENTED BY SENATORS8384Boozman, Hon. John, U.S. Senator from the State of Arkansas......     18586                               WITNESSES8788Durbin, Tara, Chief Lending Officer for Agriculture, Farm Credit89  Mid-America, Louisville, Kentucky..............................     490Hoch, Dalynn, EVP and Head of Rural Community Insurance Services,91  Zurich North America, Anoka, Minnesota.........................     692Hopkins, Caleb, Loan Production Officer, First Dakota National93  Bank, Halbur, Iowa.............................................     894Noble, Ben, Executive Vice President and Chief Operating Officer,95  Riceland Foods, Stuttgart, Arkansas............................     996Rowe, Jr., Sedrick, Farmer/Owner, Rowe Organic Farms, Albany,97  Georgia........................................................    119899                              ----------100101                                APPENDIX102103Prepared Statements:104    McConnell, Hon. Mitch........................................    34105    Durbin, Tara.................................................    35106    Hoch, Dalynn.................................................    41107    Hopkins, Caleb...............................................    48108    Noble, Ben...................................................    59109    Rowe, Jr., Sedrick...........................................    64110111Document(s) Submitted for the Record:112Booker, Hon. Corey:113    National Young Farmers Coalition, letter for the Record......    70114115Question and Answer:116Durbin, Tara:117    Written response to questions from Hon. Adam Schiff..........    76118Hoch, Dalynn:119    Written response to questions from Hon. Adam Schiff..........    77120Noble, Ben:121    Written response to questions from Hon. John Boozman.........    82122    Written response to questions from Hon. Adam Schiff..........    83123Rowe, Jr., Sedrick:124    Written response to questions from Hon. Peter Welch..........    84125    Written response to questions from Hon. Adam Schiff..........    85126127    PERSPECTIVES FROM THE FIELD: RISK MANAGEMENT, CREDIT, AND RURAL128           BUSINESS VIEWS ON THE AGRICULTURAL ECONOMY, PART 3129130                              ----------131132                        TUESDAY, MARCH 11, 2025133134                                        U.S. Senate135          Committee on Agriculture, Nutrition, and Forestry136                                                    Washington, DC.137    The Committee met, pursuant to notice, at 2:30 p.m., in138Room 328A, Russell Senate Office Building, Hon. John Boozman,139Chairman of the Committee, presiding.140    Present: Senators Boozman [presiding], McConnell, Hoeven,141Ernst, Marshall, Tuberville, Moran, Klobuchar, Bennet, Smith,142Booker, and Warnock.143144STATEMENT OF HON. JOHN BOOZMAN, U.S. SENATOR FROM THE STATE OF145 ARKANSAS, CHAIRMAN, U.S. COMMITTEE ON AGRICULTURE, NUTRITION,146                          AND FORESTRY147148    Chairman Boozman. Good morning, and welcome. It is my149privilege to call this hearing to order.150    We will have people kind of drift in and out. We have got a151vote going on right now, and then we have got another one that152is going to be called in a little bit, so if you are testifying153and somebody gets up and leaves, they are probably coming back.154But, as you all know, you are here at an interesting time. It155is just a busy time and a lot is going on.156    Welcome. It is my privilege to call the hearing to order. I157would like to thank our witnesses today for taking time from158your families, your work responsibilities to share your159expertise with our Committee today.160    As a proud Arkansan, I am delighted to have Ben Noble of161Little Rock, Arkansas, on today's panel as well.162    This hearing is the third in a series which our Committee163is conducting to examine the current state of America's rural164economy from the perspective of our farmers, ranchers, lenders,165and rural leaders. Having time to reflect on what we have heard166in the previous two hearings, it is clear to me that a common167theme has emerged. If we expect current and future generations168of producers to not only survive but thrive, we need to pass a169strong five-year farm bill this year that strengthens the farm170safety net and revitalizes rural communities, many of which are171struggling to retain an adequate workforce to feed, fuel, and172clothe the next generation of Americans. More than 70 percent173of all counties in this country are rural, and agriculture is174the number one industry in a large majority of those rural175areas.176    While there are numerous valuable rural development177programs in the farm bill that many of us on this Committee178champion, the most potent mechanisms for rural development are179the risk management tools that our producers utilize to secure180the financing necessary to grow and expand their operations,181which in turn support the communities they call home.182    The economic activity generated by agricultural sector in183rural communities supports everything from local retail184operations that supply inputs such as feed, seed, fertilizer,185and fuel to the grain mills, cotton gins, or other processing186facilities that provide direct employment opportunities for187local residents. Local governments count on that tax base to188provide critical services and infrastructure needed to keep189communities healthy and vibrant.190    Unfortunately, every Member of this Committee has heard191directly from farmers in their State about the very difficult192conditions they have endured over the past several years and193are likely to face in the future if things continue the way194that they are. While many of us have heard from ag groups for195years now about the importance of getting a farm bill signed196into law, I noticed a distinct change in tone beginning last197summer as I visited with not just producers but also their198lenders. One banker in Arkansas then estimated that producers199could struggle to secure financing for planting roughly 20200percent of the acres in my home State.201    Unfortunately, tough times are nothing new for our Nation's202farmer. They have endured many challenges before, but we have203entered a scenario in which many economic indicators of the204health for the agriculture sector, especially for row crops,205are headed in the wrong direction and have been doing so for206some time now. The $10 billion in economic assistance provided207at the end of last year is a critical bridge for many farmers208to secure 2025 operating loans. I appreciate the work of many209Members of this Committee in securing this assistance and look210forward to swift implementation by Secretary Rollins and the211Department.212    However necessary to ensure many farms stayed in operation213for the upcoming year, this economic assistance should not in214any way be considered a substitute for a five-year farm bill.215Whether you look at rising levels of farm debt, loan216delinquency rates, or the percent of row crop farmers that need217to refinance debt to cash-flow, it is clear that Congress needs218to act quickly to strengthen the farm bill programs. The suite219of risk management tools should provide a critical backstop for220producers and ensure adequate credit access for all generations221of farmers, but especially our young and our beginning farmers222who we are counting on to carry on the honorable work of223feeding the world.224    I look forward to hearing from our witnesses here today and225putting their advice into action as we continue our work on the226farm bill this Congress.227    Ranking Member Klobuchar will be joining us momentarily, so228I will now proceed with our witness introductions. Following229introductions, the Ranking Member will deliver her opening230statement.231    Leading off our panel today is Mrs. Tara Durbin. Senator232McConnell was unable to be with us at this moment, but he is233very proud to have Mrs. Durbin here before the Committee today.234I am submitting Senator McConnell's remarks regarding Tara into235the record. Without objection, so ordered.236    [The letter can be found on page 34 in the appendix.]237    Chairman Boozman. Mrs. Durbin serves as Chief Lending238Officer for Agriculture Farm Credit Mid-America, which is239headquartered in Louisville, Kentucky. As a member of the240organization's Executive Committee, she helps to strategize241operations across Farm Credit Mid-America footprint, which242serves residents of Kentucky, Tennessee, Ohio, Indiana,243Missouri, and my home State of Arkansas. Mrs. Durbin244understands the challenges producers are facing as she works245alongside her husband and son on the farm. I look forward to246listening to your testimony, Mrs. Durbin. Thank you so much for247being here.248    Mrs. Dalynn Hoch, did I get that right?249    Mrs. Hoch. Close enough, Dalynn.250    Chairman Boozman. Dalynn, I am sorry. I did not get it251right.252    [Laughter.]253    Chairman Boozman. We are very pleased to have you. Mrs.254Hoch serves as the Head of Rural Community Insurance Services.255She also serves as an executive member of the Crop Insurance256and Reinsurance Bureau, a member of the National Crop Insurance257Services Board of Directors, a member of the American258Association of Crop Insurance, and her family farms in the home259State of our Ranking Member. Mrs. Hoch brings valuable insight260to today's hearing through her leadership with RCIS and261intimate understanding of how crop insurance impacts farmers262and the communities in which they live. Mrs. Hoch, thank you so263much for being here. I look forward to your testimony.264    I believe Senator Ernst is going to introduce our next265witness.266    Senator Ernst. Yes. Thank you, Mr. Chair, for the267opportunity to introduce my constituent, Caleb Hopkins, who268hails from Halbur, Iowa, which is a tiny, tiny little town in269Carroll County, which is west central Iowa. If you go up270Highway 71 from my neck of the woods, you are going to end up271fairly close to where Caleb and his family live.272    Mr. Hopkins is a Loan Production Officer for Dakota MAC and273serves as the Chair for the American Bankers Association's274Agriculture and Rural Lenders Committee, which he represents275here today. Mr. Hopkins received his bachelor's degree in276Agricultural Business from the greatest university in the277United States, Iowa State University--go Cyclones--and later278obtained an advanced degree from the Graduate School of Banking279in Madison, Wisconsin.280    In addition to his work as a loan officer, Mr. Hopkins is281an active farmer with his wife and three children, raising282pure-bred Hereford cattle. I am a Hereford fan myself. When I283show for the Governor's charity steer auction, it is always a284Hereford, so thank you.285    We are all very grateful you could make it here today, and286we look forward to your valuable testimony on how Congress can287better serve, protect, and support our ranchers, farmers, and288rural communities. Thanks for being here, Caleb. We appreciate289you. Thank you, Mr. Chair.290    Chairman Boozman. Thank you. Now, it is my pleasure to291introduce to the Committee a great Arkansan from a small292community in the heart of the Delta, Mr. Ben Noble. Ben has293grown up surrounded by agriculture, has done well to serve the294industry for many years. Upon his graduation from the295University of Arkansas, Ben made his way to Washington, DC,296working as a staffer for both Senator Dale Bumpers and Senator297Blanche Lincoln of Arkansas. Blanche is up there. She is making298sure you and I behave.299    [Laughter.]300    Chairman Boozman. We often hear about the mass exodus from301rural America, that when young people leave, new ideas and302innovation leave with them. Ben is the exemplary example of303what can happen when those people return to their rural304communities. Ben uses his experiences to help guide new ideas305through his service at the Arkansas Hunger Relief Alliance, the306Little Rock Chamber Board of Directors, Commissioner of the307Arkansas Heritage Commission, and through his work in public308affairs.309    Ben now serves as the Executive Vice President and Chief310Operating Officer for Riceland Foods based in Stuttgart,311Arkansas. Riceland is the world's largest miller and marketer312of rice, a major soybean processor in the Mid-South, and a313staple for farmers and rural communities alike. Ben, thank you314for being here, and we look forward to your testimony.315    Mr. Sedrick Rowe. I am pleased to introduce Mr. Sedrick316Rowe. Sedrick is a first-generation organic peanut farmer from317Albany, Georgia. Sedrick owns and operates Rowe Organic Farms318where he grows peanuts, watermelons, sunflowers, and hemp. He319is a founding member of the Georgia Organic Peanut Association,320where he helps create markets for value-added agricultural321products and support small and medium-sized farmers in the322Southeast. He attended Fort Valley State University, where he323earned a bachelor in Plant Science with a concentration in324Horticulture, as well as a master's of Public Health with a325concentration in Environmental Health. He is currently a326candidate for a Ph.D. at Tuskegee University for Integrated327Bioscience. Sedrick, thank you so much for being here. We look328forward to your testimony.329    Again, thank you all for being here. Mrs. Durbin, you are330now recognized for your statement.331332      STATEMENT OF TARA DURBIN, CHIEF LENDING OFFICER FOR333   AGRICULTURE, FARM CREDIT MID-AMERICA, LOUISVILLE, KENTUCKY334335    Mrs. Durbin. Chairman Boozman, Ranking Member Klobuchar,336and Members of the Committee, thank you for inviting me to337testify here today. My name is Tara Durbin, and I am a lifelong338advocate for agriculture. My husband Dusty and I run a cash339grain operation, and for more than two decades, I have also340worked with Farm Credit Mid-America's customers in various341lending roles. Today, I serve as Farm Credit Mid-America's342Chief Lending Officer, where I oversee the agriculture lending343activities.344    Farm Credit Mid-America is a customer-owned lending345cooperative and a proud part of the Farm Credit System. We346serve more than 145,000 customers in Arkansas, Indiana,347Kentucky, Missouri, Ohio, and Tennessee. Together with 55 other348Farm Credit Associations, we are committed to supporting rural349communities in agriculture with reliable, consistent credit.350    Over the past several months, this Committee has heard from351producers and industry experts about the challenges emerging in352the agriculture economy. It is important for me to highlight353that we are, in fact, seeing ``a tale of two worlds'' when it354comes to the financial health of American agriculture, the355factors that most commonly determine which farm economy is356being felt include geographic region, commodity produced, farm357diversification, and financial position. I have provided more358in my written testimony, so I will just briefly describe the359financial conditions that we are seeing.360    Row crop producers are facing headwinds. However, those in361corn, soybeans, and wheat have benefited from several years of362being able to build liquidity and reinforce their financial363positions. Our cotton and rice producers, particularly our364Arkansas customers, have faced multiple years of price365volatility, quality concerns, and yield challenges, leading to366more rapid liquidity erosion. The protein sector is a bit of a367bright spot as it benefits from strong demand, limited supply,368and lower feed costs.369    We are committed to working with our customers as current370conditions are placing financial strain on many farmers,371regardless of age or experience in farming. Like other Farm372Credit Associations, we utilize several practices to work with373producers through challenging cycles. These include proactively374restructuring debt to support cash-flow concerns, providing375financial coaching and education, and using Federal programs376like crop insurance and the FSA Loan Guarantee program to377mitigate risk.378    Before I discuss the farm bill, I would like to recognize379the importance of the assistance provided in the American380Relief Act that was enacted late last year and championed by381many on this Committee. As we look to the future, American382farmers must have certainty and predictability of a strong383five-year farm bill with additional Federal investment that384reflects today's market reality. My written testimony385identifies a detailed list of Farm Credit priorities in386supporting the next farm bill, and I would like to briefly387mention two that are particularly relevant for this hearing.388    First, crop insurance is the cornerstone of the farm safety389net and one of the most important risk mitigation tools390available to our farmers. We support the strongest possible391Crop Insurance program, and we applaud the Committee for392exploring ways to enhance this vital tool to improve393affordability and coverage.394    Second, the FSA Loan Guarantee program allows lenders to395make loans to farmers who may not qualify for traditional396credit. This tool is not only important for lenders when397financial conditions and agricultural economy become more398challenging, but also helpful when working with young and399beginning producers. We thank Ranking Member Klobuchar and400Senator Hoeven for their work on the PACE Act, which will401provide critical updates to the FSA Loan program by aligning402the current costs of operating a farm with the loan limits.403    The future of agriculture relies on the success of our404young, beginning, and small farmers. Every Farm Credit405Association offers a uniquely tailored program designed to meet406the needs of their young, beginning, and small farmers. Farm407Credit Mid-America's program is called Growing Forward, which408provides special underwriting standards and tier 1 interest409rates, along with personal and business education programs.410These Growing Forward customers are expected to create business411plans and to work with their loan officers to receive financial412coaching and make sure they are on track to accomplish their413goals and support the operation's viability.414    Growing Forward supports young producers like Jordan Brewer415from LaRue County, Kentucky. In 2021, he took over his416grandfather's cow-calf operation while balancing school and417working full-time as a nurse. With the help of Growing Forward,418State and Federal programs, and hard work, he has grown his419operation and currently runs 150-head cattle herd. Growing420Forward was a critical resource that helped Jordan access the421capital needed to secure his family farming legacy.422    In conclusion, thank you very much, Chairman Boozman and423Ranking Member Klobuchar, for allowing me to testify today.424Farm Credit is committed to fulfilling our 109-year-old425mission, and we look forward to working with you as you426reauthorize the farm bill. Thank you.427    [The prepared statement of Mrs. Durbin can be found on428pages 35-40 in the appendix.]429    Chairman Boozman. Thank you, Mrs. Durbin. Mrs. Hoch.430431   STATEMENT OF DALYNN HOCH, EVP AND HEAD OF RURAL COMMUNITY432   INSURANCE SERVICES, ZURICH NORTH AMERICA, ANOKA, MINNESOTA433434    Mrs. Hoch. Chairman Boozman, Ranking Member Klobuchar, and435other distinguished Members of this Committee, thank you for436allowing me the privilege and the opportunity to testify today437on the importance of crop insurance and the vital role that it438plays in providing risk management to farmers across the439country and facilitating capital flow to the rural American440economy. My name is Dalynn Hoch, and I am the Head of Rural441Community Insurance Services, RCIS, which operates as one of442the 12 approved insurance providers, or AIPs. RCIS delivers443crop insurance nationally, so we are proud to serve farmers in444each State represented on this Committee.445    I am a proud farmer's daughter, and I now also farm with my446husband Emory and my brother Dan in the great State of447Minnesota. I learned a lot of lessons on the farm. I learned448the importance of generational values, honesty, integrity,449faith, and hard work. I also learned that sometimes we faced450terrible losses that came with large hail, flooding rains, and451weeks of drought. In 2016, I was the CFO for Zurich North452America when we acquired RCIS, and it was one of the proudest453moments in my career when I was able to call my dad and tell454him that we had just bought a crop insurance company. Now this455last year, I have had the privilege to become the head of RCIS.456    This conversation today, it is personal for me, not just as457the head of an insurance provider, but as a farm owner and458operator, and perhaps most importantly, as a farm girl who saw459how crop insurance protected us, allowed us to continue to farm460when it mattered most. I do thank those of you on the Committee461and other policymakers who have worked hard to continually462improve our farmers' most important risk management tool.463    Crop insurance is an economic driver in rural America. It464is critical to the flow of capital for our farmers as it465secures the operating loans they need with the banks. Imagine466if we had to pay all of our expenses at the beginning of the467year before we get a paycheck. That is exactly what our farmers468have to do every year with all of their input costs. Crop469insurance not only secures loans and protects the farmers when470they suffer a loss, it also spills over into the local economy,471empowering agriculture retailers and other local businesses472often the first line of unsecured debt to the farmer.473    The last several years have seen a drastic increase in ad474hoc disaster payments to rural America. It is only prudent for475this body to be looking for ways in the next farm bill to plug476these gaps in the safety net. We ask that you consider crop477insurance as the primary tool to help fill these gaps. We478discourage the creation of any disaster program that would479disincentivize farmers from purchasing crop insurance, request480recognition that companies do incur costs for administering aid481outside the purview of the Federal Crop Insurance program, and482we would oppose the creation of any disaster package that is483funded by cuts to crop insurance.484    For crop insurance to function as designed, it must be485affordable, widely available for purchase across the country,486and economically viable for the private sector to deliver and487sustain the long-term commitment of their capital, both dollars488and talent, to this great industry.489    With the growth of the program has come challenges. AIP's490expenses have grown significantly as the cost to market,491service, and adjust claims have expanded, education costs are492increasing, and investments are constantly made to improve the493tools and technologies that are needed to provide exceptional494service to America's farmers. The effects of inflation have495been felt throughout our industry. The administrative and496operating payments provided by the USDA to help cover these497delivery costs have not kept pace with either inflation or the498rising price or complexity of delivering modern day crop499insurance.500    The inflation factor adjustment that was built into A&O501calculations was unfortunately removed in 2015. These502shortfalls come out of insurers' income, dragging down the real503rate of return for the industry to levels that are just504marginally better than the risk-free U.S. Treasuries. We want505to see farmers and ranchers succeed, and as private businesses,506we must also earn an adequate return to ensure that our507investors keep this capital invested in the agricultural508industry long term.509    Crop insurance is the premier risk management tool for the510American farmer. The public-private partnership that we enjoy511delivers it in an efficient and effective way. These crop512insurance benefits have kept families on their farms and513Americans clothed, fueled, and fed.514    Thank you for inviting me to speak today and for your515continued support of the Crop Insurance program. I look forward516to answering any questions you have.517    [The prepared statement of Mrs. Hoch can be found on pages51841-47 in the appendix.]519    Chairman Boozman. Thank you, Mrs. Hoch. Mr. Hopkins.520521  STATEMENT OF CALEB HOPKINS, LOAN PRODUCTION OFFICER, FIRST522               DAKOTA NATIONAL BANK, HALBUR, IOWA523524    Mr. Hopkins. Thank you, Chairman. Chairman Boozman, Ranking525Member Klobuchar, and the Members of the Committee, my name is526Caleb Hopkins. I am the current Chairman of the American527Bankers Association's Agricultural and Rural Bankers Committee528and testifying in that capacity today.529    I have worked in agricultural banking for 13 years,530including the past two years as a Loan Production Officer for531Dakota MAC, a subsidiary of First Dakota National Bank in532Yankton, South Dakota. Before First Dakota National Bank, I533worked at a small community bank helping to lead their534agricultural lending. Agricultural bankers have a deep535appreciation for the important role producers play in our536economy and the unique challenges they face.537    Like many agriculture bankers, my passion for agriculture538goes beyond the bank. I have a herd of cattle, I am a proud 4-H539dad, and I have a crop insurance business with my wife. Our540passion for the next generation of producers goes beyond a541program or clinic. Fostering the next generation of producers542is what we do every day. I appreciate the opportunity to543present the views of the bankers at this hearing.544    Banks continue to be one of the first places that farmers545and ranchers use when looking for agricultural loans, and over54680 percent of the banks in the United States have agriculture547in their portfolio. Bankers finance all types of agriculture in548every part of the country. Agricultural lending is a good549business, and we work with our customers to improve their550business, both in the short and long term.551    I would like to start today by highlighting the current552state of the agricultural economy. I was personally involved in553congressional meetings to get economic assistance for farmers554and ranchers. The economic assistance that was passed by555Congress will provide some relief to our customers, but it556still will not be enough for many. For example, soybean acres557are expected to have a payment of $30 per acre, but estimates558in my area show farmers being short $300 per acre on soybean559ground. This is a trend across most commodities.560    USDA has projected an increase in farm income of 29 percent561due to economic assistance, but input prices are still high due562to inflation. At the same time, commodity prices are expected563to drop this year. Every region will be affected differently,564but it is becoming increasingly apparent that economic565assistance will not be enough to cover the shortfalls this year566or enhance the long-term health of balance sheets to weather567another economically challenging year.568    This is why bankers are so supportive of a long-term farm569bill. Our customers need the certainty that comes with a farm570bill, and lenders must operate on knowns, not projections. A571long-term farm bill provides certainty to agriculture, which572allows for long-term planning. We look forward to working with573the Senate Agriculture Committee to develop a new farm bill.574    ABA does have a list of priorities that bankers would like575to see in the next farm bill that I have highlighted in my576written testimony. This includes increasing FSA Guaranteed and577Direct Loan programs. We thank Senators Hoeven and Klobuchar578for the PACE Act that creates a model for how this can be579achieved. Additionally, changes to eligibility for beginning580farmers and ranchers is vital to bringing in the next581generation of farmers and ranchers. Bankers are supportive of582modernizing reference prices and protecting and enhancing crop,583livestock, and dairy insurance programs. Last, Farmer Mac is a584tremendous partner to the banking industry, and we support585efforts to modernize Farmer Mac to meet the modern needs of586American agriculture.587    Beyond the farm bill, ABA is looking forward to the tax588reform process that is playing out in Congress. Our customers589rely on keeping the current estate tax exemptions and capital590gain exemptions. The Access to Credit for our Rural Economy591Act, better known as the ACRE Act, is tax legislation that592would create a level playing field for all lenders in593agriculture. ABA analysis has shown that the ACRE Act would594reduce the effective interest rate by up to one percent for595qualified borrowers. We thank Senators Moran, King, Tuberville,596Gallego, Marshall, and Cramer for sponsoring this vital piece597of legislation. The ACRE Act will increase credit availability598to rural America while driving down the cost for our borrowers.599We believe this is the right solution to help rural America600during these tough economic times, as well as in the long term.601    Farm banks are healthy and continue to be forward-looking,602growing capital and increasing reserves. Bankers are proud of603the work we do to support our Nation's farmers and ranchers.604The agriculture economy is a critical part of our economy, and605America's banks remain committed to serve it through good times606and bad.607    Thank you. I would be happy to answer any questions you may608have.609    [The prepared statement of Mr. Hopkins can be found on610pages 48-58 in the appendix.]611    Chairman Boozman. Thank you. Mr. Noble.612613  STATEMENT OF BEN NOBLE, EXECUTIVE VICE PRESIDENT AND CHIEF614     OPERATING OFFICER, RICELAND FOODS, STUTTGART, ARKANSAS615616    Mr. Noble. Good afternoon, Chairman Boozman, Ranking Member617Klobuchar, and Members of this Committee. It is truly an honor618to be before you today.619    As Senator Boozman shared earlier, many years ago, I sat as620a staffer in this very room to then-Senator Blanche Lincoln of621Arkansas. She eventually served as Chairman of this Committee,622and it brings back a lot of memories seeing her portrait here623on the wall today. Nearly 30 years later, our own John Boozman624now holds that gavel, and I cannot think of a better man to625lead this Committee, so forgive me for just taking a moment626here, but this is truly a special moment for a boy from627Arkansas.628    I am Ben Noble, Executive Vice President and Chief629Operating Officer of Riceland Foods, but I am also the son of630Buddy Noble and the brother of Andy Noble, who own and manage631Noble Farms. As we discuss the state of the farm economy today,632my story unfortunately mirrors what is happening across the633countryside in rural America. Due to high input cost and lack634of profitability over a multi-year period and the low635probability for profitable returns this year, my family is636pulling the ripcord. 2025 will be the first year since 1890--637that is 135 years--that a Noble has not actively farmed in east638Arkansas. We are selling our equipment at an auction this639Friday.640    Our experience is unfortunately not unique, as lenders and641farmers across the Mid-South face tough decisions with the642prospect of low commodity prices, high input costs, and extreme643uncertainty and volatility. This situation has profound and644far-reaching effects across the economy and the livelihood of645rural America.646    Riceland Foods is a farmer-owned cooperative that has been647in business since 1921. We are the largest miller and marketer648of rice in the United States, and we also serve as the largest649marketer of soybeans in the Mid-South. Our membership consists650of 5,500 members across America, and our farmer patrons are651concentrated in Arkansas and Missouri. We directly employ over6521,700 people and indirectly support hundreds of jobs in rural653America.654    For decades, our business model has been to provide655marketing options for our members' rice and soybeans, process656the grain, and then sell and distribute the finished goods657through domestic and international channels. This activity658generates well over $1 billion annually and is turned over659multiple times in our region of the Mississippi Delta.660    The key in the aforementioned business model is the ability661of the farmer to secure financing and produce a crop on an662annual basis. Also key in this equation is a strong economy663that allows farmers to remain profitable. Without our farmer664members, all the economic activity that Riceland Foods665generates and the jobs we support disappear, leaving economic666deserts in many areas of east Arkansas and the Bootheel of667Missouri.668    Financial institutions work diligently and creatively to669keep farmers on the farm this growing season, but a shadow of670uncertainty remains across the entire system. Planting671decisions and seed purchases are often made months before now.672As final assessments are made, productive farmland will likely673remain fallow this year due to some farmers' inability to674attain financing. Ultimately, this could reduce the production675of rice, soybeans, corn, and possibly other commodities in our676growing region. Businesses like ours are struggling to plan677accordingly to receive and process this year's crop.678    Our company has four million locations across Arkansas and679Missouri. We also have 24 drying locations across the same680footprint. In small rural towns like Stuttgart, Hazen, Poplar681Bluff, New Madrid, Wheatley, and many, many more, Riceland682Foods is the largest employer and the main driver of the local683economy. When our farmers suffer, we suffer. Ultimately, this684impacts the entire region. It is not overstating to say that if685Riceland Foods does not operate in many of these small towns,686the towns no longer exist.687    We must take serious and substantial action that results in688updated reference prices that secure a strong safety net for689rice farmers. This means a substantial increase in the PLC690reference price and the assurance that payment limitations are691increased to reflect modern day farming. These enhancements692must be effective for the 2025 crop year. Securing a strong693safety net for our growing members also provides stability for694both farmer-owned cooperatives and private mills.695    Along those same lines, I would be remiss if I did not696mention the importance of tax policy on our cooperative. Of697particular significance to cooperatives such as Riceland, the698section 199A deduction stands out as one of our farmer members699most crucial tax policies. This provision enables cooperative700to pass tax deductions directly through their members, who then701reinvest the funds back into their operations. These702reinvestments, in turn, strengthen local economies by creating703jobs, increasing spending on agriculture production, and704fostering growth in rural communities.705    I will finish where I began in this full-circle moment for706me. I have witnessed firsthand the work Congress can do to707support American agriculture as both a Senate staffer and a708professional in this industry working on behalf of farmers. Now709is the time for Congress to act on a new farm bill and support710the industry I devoted my life to before it is too late.711Unfortunately, there are many farmers out there who will not be712farming this year, and the outlook is even more grim. I implore713you to act. Keep farmers farming. Every American is relying on714this Committee and your colleagues in Congress to deliver.715    Thank you for the opportunity, and I look forward to716answering any questions.717    [The prepared statement of Mr. Noble can be found on pages71859-63 in the appendix.]719    Chairman Boozman. Thank you, Mr. Noble, and thank you for720sharing your story. Your family has been a powerful force for721agriculture since 1890 and are so well respected, but I think722it really highlights how difficult it is right now, and the723importance of the hearing today and the importance of getting a724five-year farm bill done. I know your ancestor of 1890 is very,725very proud of you right now.726    Now, we would like to hear from Mr. Rowe.727728   STATEMENT OF SEDRICK ROWE JR., FARMER/OWNER, ROWE ORGANIC729                     FARMS, ALBANY, GEORGIA730731    Mr. Rowe. Mr. Chairman, Ranking Member, and Members of the732Committee, thank you for the opportunity to be here today. My733name is Sedrick Rowe. I am a young, first-generation farmer734from Albany, Georgia. I own and operate a 30-acre farm where I735grow organic hemp, peanuts, sunflowers, and watermelons. Today,736I am going to talk to you on some highlights of my farming737experience and talk about access to credit and risk management738resources.739    I am concerned that without a new farm bill, the safety net740would continue to be largely out of reach for us. This741Committee has the opportunity to promote effective policy to742help new farmers enter and stay into the agriculture743generation. I did not inherit land. I had to build it from the744ground up. Without FSA, I was not able to purchase my first745land.746    At the same time, I have also had some frustrations with747FSA. For example, I was denied a microloan early on, even748though my business plan was clearly sound. FSA is the go-to749agency for farmers who cannot find credit from other means.750Recently, they have been making some improvements. For example,751recent critical updates from the FSA Loan program include752prioritizing financial stability, offering more flexible terms,753emphasizing savings and reserve payment scheduling, avoiding754necessary impacts from balloon payments, and appropriate755collateral requirements to reduce borrower risk without756increasing the risk of the agency. We need to ensure757appropriate staff levels are there too. It is important that758someone is there to answer the phone at FSA and also other USDA759offices.760    Looking to the farm bill, last year, versions include761proposals to improve beginning farmers' access to credit. The762next farm bill should include provisions that would increase763microloan limits to $100,000; match loan limits across764programs, including direct farm ownership down payment loan765programs; remove the seven-year limit on eligibility for766operation loans; support distressed borrowers; a pilot program767preapproved for direct farm ownership loans; and also pilot768loan programs to help with startup costs.769    Credit is only part of the picture. Farming is a risk, and770we all know, sometimes, no matter how much you prepare, there771is still uncertainty. The Risk Management Agency and FSA offer772important risk management programs and financial relief to773farmers and ranchers exposed to loss from events such as774drought, hail, floods, and also diseases. These farm safety775nets must be strengthened and support young farmers. Also, high776value organic crops are often undervalued by insurance777coverage. For me and many other farmers, RMA does not offer778insurance products that cover what we are growing on a small779scale.780    Whole-Farm Revenue Protection is the only insurance program781that is designated for small farmers and diverse farms. Only 10782whole farm policies were sold in Georgia last year. Eighty-783three percent of the farmers in Georgia do not have crop784insurance. I encourage this Committee to incentivize insurance785agencies to sell crop insurance to small-scale and specialty786crop farms like me. I also encourage this Committee to consider787new insurance products specifically designated to deal with788weather impact.789    For farmers who cannot access RMA programs, the FSA offers790noninsurance crop disaster programs. This is an important791program. This program needs to continue in the support by young792farmers. By creating a revenue-based option with NAP, similar793to the Whole-Farm Revenue Protection, the agency could offer an794onramp to help farmers transition from NAP to whole farm795revenue protections once they have acquired operational796history. Getting more farmers enrolled in NAP early on is the797goal, and keep supporting them with the basic safety net. It798also gets them in the door with USDA when it comes to loan799access.800    What I really want to emphasize today is that, as a young801farmer, we need to be heard. We need to know that our802experience is being considered when it comes to the farm bill803being put together. We need certainty. We need certainty that804Congress will fulfill the responsibility and deliver an805effective farm bill for all farmers. We also need certainty806that the USDA will continue to support farmers moving forward807from surviving to thriving farms. It should not be so difficult808for young and beginning farmers as myself to secure support. We809need to innovate and achieve long-term success.810    Thank you again for the opportunity to testify for this811Committee. I look forward to answering any questions you may812have.813    [The prepared statement of Mr. Rowe can be found on pages81464-67 in the appendix.]815    Chairman Boozman. Thank you, Mr. Rowe, very much.816    I am going to get into line later on, so we are going to go817right to you, Mitch. I know you have got lots of stuff going818on. You are an important guy. As I was explaining to them819earlier, there is just a whole lot of stuff going on, so you820are welcome to go ahead and question the witnesses.821    Senator McConnell. Thank you, Mr. Chairman.822    I want to thank Tara Durbin from my hometown of Louisville,823Kentucky, and Farm Credit, and the other witnesses for being824here.825    I have been on this Committee my entire time in the Senate.826It is important to Kentucky. We have 70,000 farms, most of them827small. Small farms in particular make up the backbone of828agriculture in my State and many others.829    As my colleagues on the Committee know well, farmers face a830whole lot of uncertainty in today's economy. Unstable markets,831volatile prices, record drops in farm income have made this832job, which was already difficult, even harder. Kentucky farmers833and farmers across the country are grappling with a steady834decline in farmland itself. It is more important than ever that835we ensure our farmland remains farmland, while providing836opportunity for new farmers to get involved in the agricultural837economy.838    I was pleased to work with the Kentucky Farm Bureau on839legislation that would offer retiring farmers a viable path to840transition their farmland to the next generation of farmers.841Protecting American Farmers Act would reduce the tax burden on842selling farmland and encourage landholders to keep their843farmland in the hands of active, young farmers.844    Tara, what financial tools would help address the problem845of land and capital access that American farmers face?846    Mrs. Durbin. Thank you, Senator, for your question. As you847mentioned, that is a very complex issue. As you mentioned, you848know, a lot of communities in Kentucky specifically are kind of849wrestling with trying to solve for that. That is something that850at Farm Credit Mid-America we have witnessed across our service851territory. I, you know, personally want to share I have852witnessed that, myself and my husband. About 20 miles from our853home farm, a microchip plant has come in, and so that has854driven up the cost of land. Your question and that complex855issue hits very close to home to me as well.856    You know, I would challenge you to consider looking for857ways that we can incentivize farmland to stay in agriculture858production. You mentioned our young, beginning farmers. You859know, that incentive would really help our young, beginning860farmers, as far as getting into agriculture. The barriers to861entry into agriculture, as Sedrick mentioned, are huge when we862think about land. Looking for ways to incentivize keeping863agriculture in production is definitely a way that we could864work together to solve that complex issue.865    Senator McConnell. I assume Congress must have some role in866all of this. Does it require changing the law to try to get the867outcome that we prefer?868    Mrs. Durbin. That would be a question that I guess we would869have to work on. As I said, that is a complex issue, and that870would take a lot of work from you all pulling together and871working with industry partners as well, as you said you had872worked with Kentucky Farm Bureau and some others to help873resolve that issue.874    Senator McConnell. Okay. Thank you. Thank you, Mr.875Chairman.876    Mrs. Durbin. Thank you.877    Chairman Boozman. Thank you, Senator McConnell. Senator878Hoeven.879    Senator Ernst. Thanks to Senator Hoeven for allowing me to880hop ahead.881    Thank you, Chairman Boozman, and to our panel of witnesses882for being here today, we really do appreciate it, and would883like to start with crop insurance. Mrs. Hoch and Mr. Hopkins,884crop insurance is the most effective and reliable risk885management tool available to farmers that must remain886affordable and accessible. Over the years, Congress has887approved multiple rounds of ad hoc disaster payments to help888farmers recover from severe weather events. We see these889frequently in Iowa and, most recently, last December. I am890thankful Secretary Rollins is moving quickly to disburse to891these hurting farmers.892    While these payments offer relief in times of crisis, they893are slow, they are unpredictable, and subject to political894gridlock, leaving farmers uncertain about when or if help will895actually arrive. Iowa farmers who have faced multiple natural896disasters in recent years have made it clear that they need897certainty and protection in real time, not months or years898after the damage is done.899    Mrs. Hoch, can you explain why Federal crop insurance is900superior to the ad hoc disaster payments? Second, do you see901any improvements that Congress needs to make in the next farm902bill?903    Mrs. Hoch. Thank you very much for the question. I made904some comments on that in my opening remarks. The disaster905payments that have been made in recent years have been906significant, and there is true opportunity to look at crop907insurance. A number of those have been already developed,908right? Could be the products, the indexed products that were909made available in the Southern part of the country. There are910area-based plans that can additionally help a farmer to have911additional cover beyond their immediate cover. These are912important steps that we can take. We can work together through913508(h) products, which allow that opportunity for new products914to be brought forward and developed, that we can work915creatively together to ensure that we bring what was more916timely and targeted than ad hoc and, as my dad always told me,917hope is not a plan----918    Senator Ernst. Yes.919    Mrs. Hoch [continuing]. and ad hoc disaster can be hope-920based, and that is why that certainty that your farmers say in921Iowa--it is the same in Minnesota--that certainty is so922critical. It is also critical to my banking colleagues as well.923The ability to work creatively together to find ways to move924those disaster payments into crop insurance where there is a925risk sharing. The farmer takes the risk, the government takes926risk, and as insurance providers, we also take risk. That927together creates a very effective and efficient process with928competition to bring the best results to our farmers.929    Senator Ernst. Very good. Hope is not a plan. Okay.930    Mr. Hopkins, can you expand on this a little bit and help931us understand why crop insurance is a necessary tool for932farmers to have when you are making loans to those farmers?933    Mr. Hopkins. Thank you, Senator. I appreciate the934opportunity to discuss this. Yes, crop insurance is the number935one risk management tool in the belt for agriculture lenders.936It is a tool that also puts the power back in the producers'937hands. They have the opportunity to look at different coverage938levels and make those decisions about their operation, not only939on the risk management side, it also creates marketing940opportunities for producers when it comes to marketing those941crops proactively throughout the year. That level of certainty942helps bankers make that decision as we look at renewing943operating lines. Reference prices combined with crop insurance944are the two most important tools that bankers have.945    Senator Ernst. Wonderful. Thank you, Mr. Chair. I am going946to yield back.947    Chairman Boozman. Senator Smith.948    Senator Smith. Mr. Chair, since I just got here, I will949defer to Senator Tuberville if he has not asked questions, and950then I will be ready to go. Thank you.951    Chairman Boozman. No, that is fine. Senator Tuberville.952    Senator Tuberville. Well, thank you very much.953    Welcome. Glad you are here. Unfortunately, we have been954hearing some very bad news. Mr. Noble, I have got friends in955Arkansas, you know. I am hearing from them quite often. Our956agriculture economy is a disaster right now, and we have957obviously failed in some degree. I do not know where it has958failed, but it is obviously in a tailspin, and we need to help.959    Mr. Noble, what can we do to help? I mean, you are seeing960all this going on firsthand. What can we do to help?961    Mr. Noble. Yes, the main thing, Senator, is quick action on962a farm bill. I mean, obviously, that is easy to say and hard to963accomplish, but I think everybody up here has said something964along the similar lines, that long-term policy matters, and it965matters to agriculture lenders. It matters to the farmers that966are the recipients of the loans, but there has got to be some967certainty.968    At the risk of spinning off into another aspect, we face969intense international competition with the commodities that our970company trades in. We have always been free traders, but quite971frankly, trade has got to be fair, and it has not been. There972is a lot of challenges and complexities to that. If we are973going to ask our domestic producers to compete in a worldwide974market, there has got to be stability there, and there has got975to be certainty. The quicker you all can provide that, the976better.977    Senator Tuberville. Yes, thank you. I am hoping President978Trump is right on the situation right now with tariffs.979Obviously, it is our last chance to do something to help this980country, especially our farmers and producers.981    Mrs. Durbin, I have been talking about the need to raise982FSA guaranteed loan limits for some time. I was pleased983Chairman Boozman included this in his framework. Can you984discuss the importance of raising guaranteed ownership loans to985$3.5 million?986    Mrs. Durbin. Yes, so thank you, Senator, for that question.987At Farm Credit, we utilize the FSA Guaranteed Loan program as988an important tool for serving our customers. Specifically our989young, beginning, and small customers, that tool is extremely990important. That would allow us to loan to more customers, to991more farmers, and help them get their operations up and going,992but also as a risk-mitigating tool for us to better serve993agriculture.994    Senator Tuberville. Thank you. Mr. Hopkins, we are trying995to save not just the farmers that have been doing it for a long996time, like Mr. Noble, but we are trying to get young farmers997involved in this fiasco as we are looking at that. Why in the998world you do it, I do not know, but hopefully, there are a lot999of people out there that want to get into farming. I know at1000Auburn, you know, we have an agriculture department that is1001very strong, and you see a lot of great activity. How do we do1002that? How do we get young people involved? We lost 150,0001003farms in the last four years, a disaster that nobody is talking1004about.1005    Mr. Hopkins. Definitely. Thank you for the question,1006Senator. We start with the farm bill with increasing lending1007limits. As much negativity as we see surrounding agriculture, I1008am very optimistic when I look at young producers we have1009around our area that are very on top of management. They are1010very on top of technology. They are looking for opportunity.1011The question is how do we give them the opportunity? What tools1012do we have to provide them with opportunity as capital expenses1013are getting to be so high that the barrier to entry into1014agriculture, like you said yourself, why would you want to do1015it? But there are still individuals with that passion to be1016producers for this country.1017    Senator Tuberville. Yes.1018    Mr. Hopkins. Raising those lending limits in order to keep1019pace with that increased capital requirement allows us to1020provide that capital to those producers.1021    Senator Tuberville. One point five million dollars for a1022cotton picker, man, we have lost it, you know?1023    Mr. Rowe, Tuskegee, Alabama, glad to see somebody from my1024home State and close to my hometown, and I know you are an1025Auburn fan, right?1026    Mr. Rowe. Yes, sir.1027    Senator Tuberville. Yes, good.1028    [Laughter.]1029    Senator Tuberville. Good answer. Good answer. Hey, being a1030peanut farmer, tell us how peanuts have weathered this storm1031because peanut prices have been pretty good over the last few1032years. What do you see for the future of peanuts?1033    Mr. Rowe. Thank you for the question, Senator. Personally,1034my opinion when it comes to the peanut industry, it is growing1035strong. Peanuts are a legume that grows on the ground, so a lot1036of weather impact does not affect the peanut itself during the1037growing season.1038    What I can say is that it is challenging with tariffs being1039raised, prices go up for growers, and access to land is very1040critical to stay surviving with rising tariffs. In order for1041farmers to survive, they have to plant more acreage, and that1042can be a challenge itself.1043    Senator Tuberville. Thank you. Thank you. Thank you, Mr.1044Chairman.1045    Chairman Boozman. Thank you. Mr. Noble, I truly believe1046there is no greater tool for rural development in many1047agriculture communities than strong risk management tools.1048Riceland is an anchor of the community in eastern Arkansas. Can1049you illustrate for the Committee the impact a strong farm1050safety net has on rural communities?1051    Mr. Noble. Sure, Senator. You know, when you think about1052the support we are talking about with the safety net for1053farmers, it sometimes gets lost. That is just a transaction1054with the government and the farmer. I guess in one sense it is.1055But when you think about how many times that dollar turns over1056economically in a rural community, whether it is the grocery1057store, rural health facilities, machinery repairs, countless of1058other small businesses, rural America ultimately depends on the1059farmer as the backbone and really the heart of their entire1060community.1061    I think I shared earlier, for businesses such as ours, when1062you go to many of these small towns, we are the largest1063employer, if--I do not want to say the only--but we are a1064significant player in some of these really small towns. Without1065a significant safety net, I kind of shudder to think what is1066going to happen to some of those areas.1067    Chairman Boozman. Mrs. Hoch, do you want to add to that?1068    Mrs. Hoch. I think the importance of crop insurance comes1069into play here as well, the ability of the Committee to1070continue to deepen coverage levels and the premium support for1071our farmers through the work that you have done in such areas1072as area plans. I will give you a personal example. When you are1073facing extremely high input costs, the importance of being able1074to secure that loan, of being able to have a sense of certainty1075around the growth of your crop can actually be covered in the1076event of a loss. Today, that coverage for soybeans would not be1077adequate, and just even the highest level, which is what my1078family takes of the MPCI coverage. The ability to layer on, for1079instance, the ECO plan that is out there so that it provides an1080additional cover from an area perspective, it allows you to1081increase that coverage level in the event that there is a loss.1082    However, I would make two really critical points around1083this. The first one is that it is really important with these1084area plans that a farmer is well educated by their agent and1085their provider, that it does not supplant their individual1086coverage for their farm. They still need to maintain that1087individual coverage and then could layer on additional area1088coverage to give them more cover in the event of a loss.1089    It is also important that these products, as they continue1090to be developed, I think they are an important tool for our1091farmers of all sizes. As they are developed, it is very1092important that they remain actuarially sound.1093    Chairman Boozman. Very good.1094    Mr. Hopkins, last summer, lenders like yourself started1095sounding the alarm bells that getting financing might be1096difficult heading into 2025. Can you give us very quickly just,1097you know, something in regard to where we are at with credit1098availability in light of the current farm balance sheet?1099    Mr. Hopkins. Thank you for the question, Senator. Yes,1100sitting on American Bankers Agriculture Committee, I get the1101opportunity to speak with bankers across the country. It1102started in your area, in Arkansas and the Southeast, and it is1103kind of starting to move its way up through the Midwest across1104the country. What we are seeing is continued significant earned1105net worth losses across the board. Talking to lenders down in1106that area and as well as what I am seeing in the Midwest is1107certain parts of the Southeast part of the country are on year1108two, three, if not four of losses, and bankers are starting to1109have to work at workout plans, have uncomfortable conversations1110on what is the end game here?1111    When I look at the Midwest coming through renewal season,1112we are able to get all of our renewals completed this year, but1113those conversations are, what is the burn rate of working1114capital? It is creeping up on us much faster. When I was here1115last summer, I was hearing that from across the country, and it1116is hitting home right now.1117    Chairman Boozman. Okay. Very good. Senator Smith.1118    Senator Smith. Thank you, Mr. Chair. Welcome to our1119panelists. I want to say a particular hello to Mrs. Hoch, my1120fellow Minnesotan. It is great to have you on the panel today.1121    Mrs. Hoch. Thank you very much.1122    Senator Smith. I want to start out by touching on something1123that Senator Tuberville was touching on, which is the1124challenges facing folks that are just getting into farming. We1125know that the average age of farmers is creeping up, just like1126my age is creeping up. As we see this big generational1127transition in agriculture, we know that it is harder and harder1128for beginning farmers to put the tools together to be able to1129get going, whether it is access to capital or to land or to1130farm safety net programs, right, and markets. Without support,1131what I am very concerned about is that we will not see the1132transfer of land from one generation to the next, to new1133producers who maybe do not come from the farm themselves or do1134not have access to land through their families and what1135happens.1136    In Minnesota, what happens in that situation? In Minnesota,1137we have developed a beginning farmer tax credit that has been a1138really successful tool for young farmers as they try to get1139their businesses going. I know that other States like Iowa and1140Kentucky and Nebraska have also developed similar beginning1141farmer tax credit programs. What this does is it provides a tax1142credit to incentivize the sale or rent of farmland to beginning1143farmers, and I am working on making this a national program.1144    I am just going to address this question to the whole panel1145as a start. What do you see as the biggest hurdles facing folks1146as they are going to get into farming? What do you think we1147ought to be most focused on in Congress as we think about this1148big farm bill that hopefully will get moving?1149    Mrs. Durbin. Thank you for the question, Senator. One of1150the things that you have mentioned was the barrier to entry for1151our young farmers, and that is true. Land access continues to1152be a challenge for our young farmers. You also were inquiring1153about what lenders are doing to encourage young farmers to1154engage into agriculture production. The Farm Credit System, all1155Farm Credit Associations have a young, beginning, small farmer1156program.1157    Senator Smith. Yes.1158    Mrs. Durbin. Our young, beginning, Small Farmer program at1159Farm Credit Mid-America is called Growing Forward. Within that1160program, we have different underwriting standards for the1161young, beginning, and small farmers. For example, somebody that1162is starting out and getting into the agriculture industry is1163not expected to chin the bar maybe in their early 20's at maybe1164where their parents or grandparents would when we think about1165loan underwriting standards. We have different loan1166underwriting standards.1167    Specifically for those customers, they will get our tier 11168best interest rate. That is important to them. Now, that comes1169with a little caveat, and that caveat is, they go through1170educational programming, and we provide that educational1171programming to them. We require that----1172    Senator Smith. Yes.1173    Mrs. Durbin [continuing]. they put a business plan together1174to ensure that that operation----1175    Senator Smith. There is some technical assistance and other1176kind of support that goes along with that, yes, absolutely.1177    Mrs. Durbin. Absolutely. Mr. Rowe, I am sorry to--I want to1178make sure I have a chance to talk with Mr. Rowe about this. We1179know from surveys from the National Young Farmers Coalition and1180the National Farm Bureau that getting access to land, high-1181quality land, is one of the biggest barriers, and we know also1182that the average farm real estate value has increased, you1183know, pretty dramatically. Can you talk a bit about how you see1184this and what are the impacts of rising land prices on your1185business and others that are wanting to get into farming?1186    Mr. Rowe. Thank you for your question, Senator. As you1187know, like I say, land access is always a challenge for young1188farmers or farmers in general. Me, personally, you know, to1189speak on that, I would say the challenge also is that young1190farmers come from an educational background, so they are going1191to school for research and be innovative----1192    Senator Smith. Yes.1193    Mr. Rowe [continuing]. on the farm. That carries over when1194it is time to go get a loan. That is a challenge right there, a1195barrier by young farmers pursuing their education to better,1196you know, come up with different ways to grow a crop or grow it1197in a particular different environment. The challenges would be,1198you know, just having more access to opportunities for young1199farmers to be able to startup the farm, not based on the1200history of education.1201    Also, I want to thank you for your leadership on this1202issue, and I encourage this Committee to support establishing a1203pilot program to invest in local-led projects to tackle1204challenges in accessing land, credit, and markets.1205    Senator Smith. Thank you. Thank you very much.1206    Senator Klobuchar [presiding]. All right. Senator Booker.1207    Senator Booker. Thank you, and thank you for your1208generosity as well to the Ranking Member for allowing me to get1209my questions in.1210    At the last full hearing, we talked about the crisis,1211really the threat from the illegal freeze of funding that is1212imposed by the USDA on thousands of signed contracts with our1213American farmers. Two weeks have gone by, and I am getting1214continued frantic calls and emails from farmers, not just in1215New Jersey, but across the country, who invested money into1216their farms according to the terms of signed contracts with the1217USDA but who are still not receiving their reimbursement1218payments from the USDA.1219    Planting season is now here, and many of these farmers1220simply do not have the resources to get their crops in the1221ground and the absence of the funding that is owed to them,1222again, by the USDA. It is not just the signed contracts with1223the farmers, but it is also the continuing freeze of1224reimbursements to nonprofits and small businesses that provide1225assistance to those farmers. These nonprofits and small1226businesses in New Jersey and around the country are now being1227forced to lay off staff and stop helping farmers that are in1228need. To make matters worse, the USDA now plans to close local1229offices around the country that farmers rely on.1230    I have a letter dated March 10 from the National Young1231Farmers Coalition focused on the USDA funding freeze that I1232would request consent to have placed into the record.1233    Senator Klobuchar. It will be on the record.1234    [The letter can be found on pages 70-73 in the appendix.]1235    Senator Booker. I will not read the whole letter,1236obviously, but I think it is really important that we highlight1237the main message. They write, ``The abrupt freeze of the USDA1238grant funding has left young farmers nationwide in financial1239distress. Congress must act swiftly to unfreeze these funds and1240ensure that young farmers can access land, capital, and1241markets.'' To address this, I plan to file an amendment to the1242continuing resolution this week to lift the USDA freeze on1243signed contracts and to require USDA to make all past due1244payments. I am hoping others on the Committee will join me.1245    I have a question, Mr. Rowe. Could you just for a moment1246talk about the impact you are seeing from the USDA funding1247freeze on the young farmers you know and work with?1248    Mr. Rowe. Thank you for your question, Senator. The impact1249has, you know, been found, you know, that is going on in my1250area, not only me, but young farmers, is with the freezing,1251uncertainty is bad for farmers. It is bad for business. Not1252only that, but we do not have anyone to talk to when you go to1253these local FSA offices or USDA offices. Having someone in the1254office or boots on the ground is affecting us when it comes to,1255you know, managing different practices that we are doing on our1256farm. Also, contracts with other USDA agencies are on pause,1257and that means a lot of farmers will have to cancel their plans1258for that year, or if they were growing a particular crop based1259on that contract, it is a pause.1260    With the funding freeze, a lot of opportunities that1261farmers have, like myself, to go out and get grant money to be1262able to make my operation more thriving is not there anymore.1263    Senator Booker. On farmers who are often struggling1264financially to make it all work, what does this mean to the1265financial well-being and stability of a lot of the farmers you1266know?1267    Mr. Rowe. They either have to not farm this year or cut1268back. But, like I say, it is a challenge itself when you do not1269have the support of the Federal Government.1270    Senator Booker. Mr. Rowe, in your testimony, you mentioned1271that 83 percent of farmers in Georgia do not have crop1272insurance, 83 percent uncovered. This is really a striking1273failure of our safety net. As you mentioned, many of these1274farmers have never had the option to purchase crop insurance1275because it is difficult to find agents that are willing to work1276with small farmers. I am seeing similar things in my State. Can1277you speak to the importance of Congress making changes in the1278upcoming farm bill to ensure that crop insurance agents are1279incentivized to sell crop insurance to small farms like yours?1280    Mr. Rowe. Thank you for your question, Senator. I just1281encourage the Committee to, like I say, incentivize crop1282insurance agencies to sell crop insurance to small-scale1283farmers like myself and also specialty crops because, right1284now, it is a waste of their time dealing with a small farmer1285like myself. Large crop insurance does not particularly focus1286on young farmers because they do not have any type of risk1287management there themselves.1288    Senator Booker. That is really enlightening. Thank you very1289much.1290    In the 10 seconds I have left--and I remind you, this is1291for the permanent Senate record--I and you both played college1292ball. My press guide listed me as 68", 270. Was your press1293guide equally as inaccurate in listing your height and weight?1294    Mr. Rowe. Yes, sir, he was.1295    Senator Booker. Okay.1296    [Laughter.]1297    Senator Booker. Thank you very much.1298    Senator Klobuchar. Okay. Very good. I am not going to ask1299anyone else their weight. I just want to be clear.1300    [Laughter.]1301    Senator Klobuchar. Okay. Thank you, Senator Booker. I1302apologize. We had a long leadership meeting, as you can1303imagine. Both Senator Booker and I were there. There are just a1304few things going on right now that it is in everyone's interest1305that we resolve.1306    I want to thank--I know you were introduced, Mrs. Hoch from1307Minnesota, from Anoka, Minnesota. Thank you. I am sure you1308survived without me introducing you. I heard you did a good1309job, so thank you for that.1310    Mrs. Hoch. Thank you.1311    Senator Klobuchar. We all know that our farmers are in a1312challenging environment right now. That obviously includes1313tariffs, something that is whiplashing farmers back and forth.1314You know, then they are on, then it is paused, then they are1315doubled, as happened today. That is not certainty, it is chaos,1316and our farmers are among those that are hit the hardest.1317    On top of that is input costs, and I am very concerned1318about what is happening right now as already a difficult time.1319One of the ways we can give you that certainty is by making1320sure you have access to affordable and reliable credit. That1321can mean the difference--I know you all know better than me--1322between economic viability and foreclosure. Farmers rely on1323USDA, commercial banks, and our Farm Credit System.1324    Senator Hoeven and I have worked together to expand credit1325opportunities and improve our farm loan programs. I have heard1326many of the Members mention this. This is the bill that Senator1327Hoeven and I have, and I am very much looking forward to1328working with the Chairman as we work on a farm bill to1329increasing those loan limits and improving access to credit.1330The bill also includes new authority to allow farmers who fall1331into distress to refinance USDA guaranteed loans into direct1332loans.1333    In addition to credit access, our farmers need strong and1334reliable crop insurance, and we all know that since the 20181335Farm Bill, more farmers have been able to purchase crop1336insurance, but there are still gaps in risk management options1337and access for farmers. Many small, diversified producers face1338challenges with buying crop insurance policies, particularly1339cost. That is why Majority Leader Thune, who remained on this1340Committee--I do not know where his staff is; we are very happy1341about that--he and I have worked on legislation to make1342insurance policies a little more affordable for beginning1343farmers and ranchers.1344    I want to start with you, Mrs. Hoch, and just ask you. The1345crop insurance groups you are representing here today have1346endorsed the Crop Insurance for Future Farmers Act, the bill I1347just mentioned that Senator Thune and I have and are going to1348reintroduce. Can you talk about those unique challenges for1349beginning farmers and why this legislation will help them1350better manage risk?1351    Mrs. Hoch. Thank you, Senator, and great to be from the1352same great State of Minnesota. Thank you for the question. It1353is challenging. I mean, we have heard the discussion already1354for a new farmer, and actually a young farmer, also a beginning1355farmer, right? You do not only have to start farming young. As1356you come in, there are--and I know personally--significant1357investments that you need to make land we discussed, but also1358equipment, right? The cost of equipment has become significant.1359The inputs you need to buy your seed, your fertilizer, all1360before you even know what the prices are going to be that you1361will receive at the point that you harvest and if you will have1362a harvest.1363    Crop insurance, especially for that beginning farmer, gives1364them that certainty. That certainty is what we have all said is1365so critical and important. Providing the premium support to1366those beginning farmers, I endorse that. I am happy and1367supportive of that because it also brings about education that1368brings them----1369    Senator Klobuchar. Thank you.1370    Mrs. Hoch [continuing]. into the program right away.1371    Senator Klobuchar. Thank you. Well, Senator Hoeven has1372walked in, and he and I, as I just mentioned before he even got1373here, have partnered for years on legislation to improve access1374to credit by modernizing loan limits for USDA loan programs.1375New and beginning farmers are often deemed too risky of an1376investment for commercial lenders, and high land values and1377increased costs in recent years can be prohibitive for new1378farmers. I guess I would ask you, Mrs. Durbin and Mr. Hopkins,1379can you speak to the importance of updating these farm loan1380limitations in the next farm bill? From your perspective as a1381lender, are there other improvements we should consider making?1382    Mr. Hopkins. Thank you, Senator. I would be happy to1383address that question. Like you mentioned, the increase in1384capital expenses, along with just your normal operating costs,1385have grown substantially over the last five years. When you1386look at what land costs have done, the guarantee limits have1387not kept pace in that time period. That would allow us as1388lenders to have more tools in our belt to get creative with1389producers as we work through these adverse times. Those1390increased lending limits. I have talked to some of my lenders1391from across the country, two years ago had already hit the1392limits as they were trying to figure out how to work through1393some of these losses with customers. Increasing those limits1394would again give us flexibility to work with these producers to1395keep them going.1396    Senator Klobuchar. Okay. Very good. Mrs. Durbin1397    Mrs. Durbin. Yes, thank you, Senator. I agree with what Mr.1398Hopkins shared. I would also add that, given the rising cost of1399inflation, that it is very important as we think about this1400next farm bill to properly index that so that we do not have to1401continue to keep coming back and asking for increases in farm1402bills to come.1403    Senator Klobuchar. Okay. Mr. Rowe, the one last question1404here, do the current USDA loan programs meet the needs of1405younger farmers who rely on FSA lending programs? What1406suggestions do you have to improve access?1407    Mr. Rowe. Thank you for the question, Senator. Yes, the1408programs that are currently there do support farmers and also1409young farmers, but some of the loans do not--some of the loan1410programs are still a barrier for young farmers to get into like1411for myself. I would say just to piggyback on that, just to1412focus on more so understanding that young farmers come from a1413different perspective of farming, more innovative, more hands-1414on, and it does not take a lot of land for a farmer to be1415diversified and successful.1416    Senator Klobuchar. Okay. Very good. Well, the Chairman has1417returned, so I will give him back the gavel. I never actually1418took it, but here it is. I think that Senator Hoeven is next,1419so thank you.1420    Chairman Boozman. She will probably hit me with the gavel.1421    [Laughter.]1422    Senator Hoeven.1423    Senator Hoeven. Thanks, Mr. Chairman. I just want to1424follow-up on a question Senator Klobuchar brought up. As she1425said, we put in legislation that would raise the limits on both1426the direct operating and the guaranteed ownership loans, as1427well as the guarantee programs. We have done that before, and1428that has been part of the farm bill as we reauthorize the farm1429bill, and we certainly hope to do that again this time.1430    I would ask probably both Mrs. Durbin and also Caleb1431Hopkins. I am going to give you the changes we made and just1432let you react to them and see if you have any thoughts in1433regard to it. The direct operating we increased from $400,0001434to $750,000, the guaranteed operating we increased from $2.251435million to $2.6 million. The direct ownership we increased from1436$600,000 to $850,000, and then the guaranteed ownership from1437$2.25 million to $3 million. Then we also increase the loan1438limits on the FSA Microloan program from $50,000 to $100,000.1439My question would be I would like you to react to that,1440starting with Mrs. Durbin, and then also particularly in1441regards to some of our beginning farmers as well, big challenge1442getting younger folks into farming and ranching.1443    Mrs. Durbin. Yes, so thank you, Senator, and thank you for1444continuing to raise this important issue. As we have been1445sharing today, you know, the input costs continue to rise, and1446it is important for us to be able to work more closely with our1447customers and help more farmers by using those increased loan1448limits that really align with more modernized agriculture, and1449so we appreciate your efforts in working toward that.1450    Specifically regarding our young, beginning farmers, we1451work with our young, beginning, and small farmers to have1452different underwriting standards, that they have a different1453kind of bar to chin. It is not as high as what we would expect1454someone who has been farming for 40 or 50 years to have to chin1455when we think about experiencing and building your financial1456position. That is one way that we work with our young,1457beginning, and small farmers. We also put them through1458different educational opportunities over their journey as1459customers with us, and so allowing them the opportunity to1460understand their financials, understand different decisions1461that they make and how that impacts their operation, not only1462today, but in years to come is something that we work very1463closely with our young, beginning, and small farm customers at1464Farm Credit Mid-America, and that is through our Growing1465Forward program.1466    Senator Hoeven. Well, I am going to add to that. Also,1467then, Senator Welch and Senator Tina Smith as well, who is1468Member of this Committee, have introduced the Farm Ownership1469Improvement Act where it would allow FSA to provide a pre-1470qualification so that the borrower would actually, you know, if1471they are going to acquire farmland or equipment, whatever it1472is, they can actually get pre-qualified so they do not miss1473out, for example, if they would go to an auction or to some1474type of, you know, estate sale or something like that.1475    Bring that into the discussion too. I guess I am just1476looking for any ways that we can enhance the program both for1477established but particularly for new farmers, beginning1478farmers.1479    Mrs. Durbin. Yes, so I think that opportunities like what1480you are suggesting are important to our young, beginning1481farmers, and the more ways that we can look for ways to help1482encourage and incentivize them to get into agriculture is1483important specifically for Farm Credit, as we think about our1484mission to serve customers, not only in good but also in1485challenging times. Those are great opportunities that I think1486we need to further consider.1487    Senator Hoeven. Mr. Hopkins or Mr. Rowe, any thoughts on1488enhancements?1489    Mr. Hopkins. Thank you for the question, Senator. I would1490like to elaborate on the last part a little bit more. The1491enhancement on pre-qualification would not only increase1492efficiency within the FSA loan programs, but it would allow us1493to get capital to those beginning farmers much quicker.1494Proactive education is our best tool to help young and1495beginning farmers as we look to the future. Pre-qualification1496allows them to start those conversations much earlier. I hear1497time and time again from young producers that once an1498opportunity comes, in most instances in Iowa, you have four to1499six weeks. You are seeing most of these farms go through1500auction sale, not private sale like we used to. That is not1501enough time to get through the process. The pre-qualification1502enhancement would greatly, again, improve that for young and1503beginning farmers to make sure that they are able to be1504proactive on that decision.1505    Senator Hoeven. Yes, good to hear. Then, Mr. Rowe, any1506thoughts on that?1507    Mr. Rowe. Thank you for the question, Mr. Senator. I1508support this legislation, and thank you for taking the lead on1509it.1510    Senator Hoeven. Okay. Again, thanks to all. We appreciate1511you being here very much. Thank you, Mr. Chair.1512    Chairman Boozman. Senator Warnock.1513    Senator Warnock. Thank you, Chair Boozman. Before I get1514started on my questions, I just want to recognize that among1515this incredible panel of folks testifying, I am glad that we1516got a Georgian on the panel. Mr. Sedrick Rowe is a first-1517generation farmer from Albany, Georgia, and a graduate of Fort1518Valley State University, one of our 1890 universities, land1519grant institutions and an HBCU. Thank you so very much, Mr.1520Rowe, for being here.1521    Underserved farmers, including historically marginalized1522farmers, those with limited resources, and folks who served in1523the armed forces face many structural barriers in starting and1524running their farms. But one of those barriers, of course, is1525access to credit. USDA's Farm Service Agency, or FSA, is1526frequently called a lender of last resort because it provides1527credit to folks like underserved farmers who are not eligible1528for traditional loans.1529    Mr. Rowe, did you inherit your land?1530    Mr. Rowe. No, sir.1531    Senator Warnock. What role did FSA play in helping you1532start your farm operation?1533    Mr. Rowe. FSA played a viable role when it came to1534purchasing my farm. They helped me when it came to1535understanding the value of land, understanding how production1536can be, you know, operated on that land. FSA, without them, it1537was kind of hard for me to purchase my first land.1538    Senator Warnock. It was critical for you being able to get1539started?1540    Mr. Rowe. Yes, sir.1541    Senator Warnock. Many underserved farmers do not inherit1542their land, as is the case with you, and cannot afford to buy1543it, which is why these loan programs are so critical.1544Historically, USDA has not equitably administered these1545programs. In fact, many black farmers in Georgia and across the1546country have historically experienced blatant discrimination at1547the hands of FSA, and that is why I was so glad to fight to1548secure financial assistance for farmers who had experienced1549discrimination at the hands of FSA and the Inflation Reduction1550Act. I am glad that the Biden Administration was able to get1551that money out to those farmers. But in addition to1552acknowledging past wrongs, we need to make sure that these1553lending programs work for today's and tomorrow's underserved1554farmers.1555    Mr. Rowe, what changes to FSA's lending programs would you1556recommend so that these programs work better for underserved1557farmers?1558    Mr. Rowe. Thank you for your question, Senator. As stated1559in my testimony, I think it is important that USDA carry on1560what they started by prioritizing financial stability for1561farmers, offering more flexible terms, emphasizing saving and1562reserve payment schedules, avoid unnecessary impacts to balloon1563payments, and also the appropriate collateral requirements.1564That is a big issue when it comes to getting a loan,1565collateral.1566    Senator Warnock. Of course, you have seen this up close.1567You know, this is your own story and what it has meant for you.1568It was helpful for you. But this is an important issue for all1569of us. The average age of the American farmer is reaching 601570years old, so it is in our enlightened self-interest to make1571sure that we provide a path for all of our motivated young1572people who have the grit, the work ethic, the skills to farm1573but need a path. That is the case in a number of sectors.1574Aviation sector is another. That is for another Committee, but1575it is such an important issue.1576    Farmers today are experiencing an overall lack of1577certainty. They are dealing with high input costs like fuel and1578fertilizer, as well as changing weather patterns and a longer1579and stronger hurricane season brought on by climate change.1580USDA programs aimed at helping farmers manage risk, like1581commodity support programs, crop insurance, and disaster1582assistance programs have not been updated to reflect everything1583that has changed since the last farm bill was enacted in 2018.1584    Mr. Hopkins, will uncertainty in the farm economy help or1585hurt your ability to provide credit?1586    Mr. Hopkins. Uncertainty always provides added risk. Crop1587insurance is the number one tool that agriculture lenders have1588to help mitigate that risk. The second one is the increased1589reference prices that are needed in an updated farm bill.1590Agriculture lenders that I have all talked to, we look at those1591two as a one-two punch.1592    Senator Warnock. Right. The folks you are trying to help1593right now, they are planning for the upcoming season. In the1594last two months, President Trump has threatened and rolled back1595tariffs on our largest trading partners, which farmers rely on1596for inputs critical to making fertilizer, as well as export1597markets they have worked hard to open. Mr. Rowe, which farmers1598do you think are hurt worse by uncertainty from tariffs, the1599giant farming operations or small and underserved farmers?1600    Mr. Rowe. Thank you for the question. All farmers are1601affected by tariffs, but small and beginning farmers are still1602out of the picture when it comes to that.1603    Senator Warnock. Yes. Thank you, both of you, for your1604testimony.1605    Chairman Boozman. Senator Marshall.1606    Senator Marshall. Thank you, Chairman, and welcome to all1607of our guests, panelists as well. My first question will be for1608Mrs. Durbin. Mrs. Durbin, you probably know this, but we lose1609more farmers to suicide than we do from farming accidents. We1610are losing one, two, three farmers a day now to suicide. It is1611said that the rate of suicide in farmers is multiple compared1612to other professions. I think the reasons to me are somewhat1613obvious. The stress is real out there. It is very real in1614farmland, and I bet the suicide rate in farmers is1615proportionate to their debt and their net income as well.1616    The added stress for a farmer is that this is not just a1617business I started. I am a fifth-generation farm kid, my1618children would be the sixth, and I have grandchildren who would1619be the seventh. All over Kansas, sixth, seventh generation1620farmers and ranchers are feeling that challenge so that the1621stress is real. Farmer suicide is very real as well. It is not1622often talked about, but Farm Credit is actually out there1623leading, trying to educate farmers how to recognize it, how to1624be a good neighbor.1625    I just want to compliment you, and maybe you could share a1626little bit about your program. There is no one that knows that1627customer--a good farm loan agent, community bank, Farm Credit1628knows their customer, and they know when that stress is real.1629Maybe you could talk a little bit about what you are doing to1630try to address that farmer suicide rate.1631    Mrs. Durbin. Thank you, Senator, for raising that question1632to me today. You know, what you shared is real, and I think we1633all could agree that if we look back over history, you know,1634farmers are no stranger to, you know, challenge, and our1635farmers are resilient. You know, I know some of this firsthand.1636I am a farmer myself. My husband and I have our own farming1637operation, and I understand the stress that comes with that.1638    Farmers have the most faith of anyone I know.1639    Senator Marshall. They do.1640    Mrs. Durbin. When you think about that, there is so much1641out of their control. You know, they cannot control the1642weather, they cannot control prices, and so there is a lot of1643stress that comes with that. When you think about the current1644economic environment in agriculture, that stress is compounded,1645right?1646    One of the things that I continue to be extremely proud of,1647not only as a farmer, but working for the Farm Credit System,1648specifically Farm Credit Mid-America, and the ways that we are1649partnering with our industry partners to help our customers1650experiencing that stress. One of the things that we have done1651as a system is partner with the American Farm Bureau, the1652National Farmers Union on the resilience relief, which is a1653free program for online help and coaching to farmers, farm1654families that are experiencing that stress and helping them1655work through that stress and how to do that in a way that helps1656them thrive coming out on the other side.1657    For me, working for an organization and the Farm Credit1658System that truly keeps the customer at heart, you know, our1659109-year-old mission is to serve all of agriculture and to be1660there for customers in good and challenging times, providing1661reliable credit to our farmers. That is something that I am1662extremely proud of, and I appreciate that you have raised that1663question today.1664    Senator Marshall. Yes. Just in case anybody is out there1665watching, listening, I think the number is 988. Lacy, is it1666988? The 988 number you can call if you are having suicidal1667thoughts. Maybe it is your neighbor, though, that is having--1668you know, you recognize something about your neighbor, that1669they are not sleeping well, that they are not going to the high1670school basketball games this time of the year, they are not1671going to church, that you might recognize something. Be a good1672neighbor and say, hey, let's go get a cup of coffee or, if it1673is really bad, let's call 988.1674    Let's go to Mrs. Hoch next. You deal with crop insurance1675every day, right?1676    Mrs. Hoch. Yes.1677    Senator Marshall. Okay. I want to make sure I understand,1678why is crop insurance increasing so much? I mean, I assume it1679is. Is it input costs? Is it Mother Nature? Why are crop1680insurance rates going up?1681    Mrs. Hoch. Yes. I mean, I think crop insurance creates1682certainty.1683    If I can comment on your previous----1684    Senator Marshall. Oh, please do.1685    Mrs. Hoch [continuing]. question, we are passionate at RCIS1686around the mental health and wellness of our farmers. It is a1687topic we have been trying to raise more to the forefront, so I1688love that you raise that.1689    As crop insurance, actually, our adjusters are out there on1690the frontline in the moment when that loss occurs, and, having1691been there myself, it is extreme stress for a farmer. You are1692thinking about the loan you have to pay off, you are thinking1693about your family, you are thinking about education for your1694kids, and you are facing a loss and not quite sure what is1695going to happen. Those crop insurance agents, we have created1696training for them to be first responders, to have a sense of an1697awareness when they are interacting even with a farmer out in1698the field in that loss-adjusting moment. There are so many1699moments that we can all take to be good neighbors, to be1700careful and thoughtful about the mental health and wellness of1701those around us. I wanted to----1702    Senator Marshall. Thank you.1703    Mrs. Hoch [continuing]. add that. I think it is so1704important to share.1705    Senator Marshall. If I could share one thing back with you,1706and I talked to this with Farm Credit. You need to make sure1707that your own employees get some TLC after those events as well1708because it is traumatic to them as well. No one likes to go in1709and have a metal shed sale. No one likes to go in there in1710these traumatic events and work the adjustment. It is tough on1711your employees too.1712    Mrs. Hoch. Very much agreed. Back to your first question,1713crop insurance is a really important tool. The availability of1714that to all farmers across the country is critical to this1715program, ensuring that it is affordable, that it is widely1716available, that it serves our farmers across all crops, and1717that, important to the program itself, that it is actuarially1718sound, that we have the right data, we have the right1719understanding of those products to make sure that they are1720available to serve our farmers in America when they need it the1721most.1722    Senator Marshall. When I ask people why is flood insurance1723going up so much, and the answers would be, well, it costs a1724lot more to replace a home, and there are more storms, there1725are more floods. In crop insurance, is it also a reflection,1726though, of just rising input costs and interest rates as well?1727I assume there are some reasons.1728    Mrs. Hoch. Yes, the cost of crop insurance will be driven1729by two predominant things, the yields that come out, and those1730yields can be impacted by weather, they could be impacted by a1731farmer's particular choice around seed or inputs that they put1732into their crop, and it will be absolutely impacted by the1733commodity price.1734    Senator Marshall. Thank you. Thank you so much, Chairman.1735Sorry to go over. I yield back.1736    Chairman Boozman. No, thank you. That was really an1737important line of thought and questioning. Senator Moran.1738    Senator Moran. Chairman Boozman, thank you.1739    The Chairman's mark of his farm bill framework extends this1740opportunity for beginning and veteran farmers to get a benefit1741on crop insurance for the first five years and extends that to1742ten. Can someone tell me the value of that? I think, Mr. Rowe,1743maybe you are a beneficiary of that program. Five to ten years,1744does that make a difference in what we are trying to accomplish1745in encouraging beginning farmers to begin farming and to stay1746in farming?1747    Mr. Rowe. Thank you for the question. Yes, sir, five to ten1748years, that is reasonable time based on my experience and what1749I see with my colleagues.1750    Senator Moran. What kind of benefit does this crop1751insurance--what does that benefit look like to you?1752    Mr. Rowe. It is already a risk itself, so with crop1753insurance, it basically gives me a sigh of relief that, no1754matter what happens, I have someone that can, you know, not say1755take care of the debt I may have to face, but also give me a1756starting point to be able to move forward.1757    Senator Moran. In the absence of crop insurance, what would1758your circumstance have been in starting your operation, and how1759would your relationship have been with your banker if you could1760have gotten a relationship with a banker?1761    Mr. Rowe. Thanks for the question. The banker would have1762loved that a lot, knowing that I had a way to be able to take1763care of my loan. With the crop insurance, for me, personally,1764it helped me when it comes to knowing what I am going to plant1765that year and knowing that I am covered no matter what type of1766payment I may have. But without that crop insurance, you are1767really taking a big risk.1768    Senator Moran. In your specialty crop world, crop insurance1769is working on those crops, working well?1770    Mr. Rowe. No, sir. The specialty crops that I grow, they do1771not offer crop insurance for such as hemp. That is a fairly new1772crop in the State of Georgia, and a lot of crop insurance do1773not want to take the risk, like I say, when it comes to that1774crop.1775    Senator Moran. Mrs. Hoch, I think you testified--my notes I1776can hardly read--but you cautioned us about disaster assistance1777that damages the viability of crop insurance, that you could1778have a disaster program, I suppose, that diminishes the desire1779of farmers to purchase crop insurance and spread those risks1780among producers. Tell me more about that. I guess my question1781is, what about the disaster assistance that we provided in1782January, in December? Is that an impediment to crop insurance?1783    Mrs. Hoch. Thank you for the question. The disaster relief1784that was provided, these are critical sources of funds to1785farmers. They are going to help, particularly as they are1786looking to pay down operating loans when there has been1787multiple years.1788    My point around it is, crop insurance, we cannot cover1789every single gap. We are not here for every single situation1790that could occur, so there are moments when disaster aid is1791incredibly important. My hope is, is that we can continue to1792work together to find more opportunity, to find more products1793that can work, that can be actuarially sound, and help cover1794some of those gaps so that it is distributed out in a fair and1795equal way through a very efficient system which the public-1796private partnership has built. It gets those payments to a1797farmer in a very efficient, fast, and effective way.1798    Senator Moran. Are the circumstances in which actuarially1799sound occurs, are they increasing or decreasing?1800    Mrs. Hoch. Sorry, could you repeat that?1801    Senator Moran. Yes, the question is, crop insurance is1802becoming more available or less available because of the1803requirement of actuarially sound? Are we able to get more crops1804covered and be actuarially sound, or has it become more1805difficult? The gaps you talk about, are they increasing or1806decreasing?1807    Mrs. Hoch. I think that the gaps are decreasing, and we1808would like to see them continue to decrease more. The1809importance is obtaining that data underneath on the products1810using the 508(h) process that the act allows for to be able to1811bring forth that data, to get that actuarial soundness so that1812you can provide crop insurance to that product.1813    Senator Moran. That 508 process, is it used to provide new1814insurance products or modify existing or both?1815    Mrs. Hoch. Both.1816    Senator Moran. Okay. I think those are my questions. Thank1817you very much.1818    Oh, Mr. Noble, I am saddened to hear the story that you1819told today. I am sorry that you have a personal circumstance,1820and it is the--you know, a primary reason I asked Kansans to1821give me the chance to represent them here is to try to make1822sure that rural America is alive and well. While I do not know1823your family's operation well, it has a reputation of being1824solid and pillars of the community, and it is a real--the loss1825is economic as well as just like leadership within the1826community. The future of the places that most of us come from1827is determined on whether people like you and your family are in1828business and are part of the community, and I am saddened by1829what you described today is occurring.1830    Mr. Noble. Thanks for your word, Senator. I appreciate that1831greatly. As we were able to reconnect earlier, you and I have1832been able to work together on agriculture policy for a long1833time. It is great to see you in this Chair, and I appreciate1834your comments. I will pass them on to my family.1835    Senator Moran. Please do. Thank you. Mr. Chairman, thank1836you. Mr. Chairman, it is a long way from you to me.1837    [Laughter.]1838    Senator Moran. I do not really like it.1839    [Laughter.]1840    Chairman Boozman. Thank you all. Thank you again for being1841here. The hearing today was really outstanding, and we got a1842lot of good information that, along with our other hearings,1843just kind of reinforces each other about the need to get a1844good, strong farm bill and the programs you describe, you know,1845the need to improve on those, which, again, we are quite1846willing to do. This is how you do it is listening to the people1847who are literally out in the fields every day, you know, trying1848to make a living. The answers need to come from the bottom up.1849    Thank you for being here. The record will remain open for1850five days. Today's hearing is now adjourned.1851    [Whereupon, at 4:11 p.m., the Committee was adjourned.]18521853=======================================================================18541855                            A P P E N D I X18561857                             March 11, 202518581859=======================================================================18601861[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]18621863=======================================================================18641865                   DOCUMENTS SUBMITTED FOR THE RECORD18661867                             March 11, 202518681869=======================================================================18701871[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]18721873=======================================================================18741875                         QUESTIONS AND ANSWERS18761877                             March 11, 202518781879=======================================================================18801881[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]18821883                                 [all]