“It’s been pretty stressful the last couple of years, trying to cash-flow everything with the prices of the markets like they’ve been,” Tim Wells, the owner and founder of Sugar Creek Ranch, in Paragould, Arkansas, told Civil Eats. “When you throw something else on and the stress of going through the harvest, that’s just one more nail in the coffin.”
The federal government remains shut down this week, with Democrats refusing to vote on a funding bill until Republicans make efforts to extend Affordable Care Act subsidies, which are set to expire by the end of the year. So far, the political standoff appears to be far from a resolution.
For farmers, the shutdown comes at a pivotal time, when its impacts are exacerbating the ongoing, even larger challenges in agriculture. Just this week, Agriculture Secretary Brooke Rollins confirmed reports that the Trump administration plans to import beef from Argentina, adding another worry.
Furloughs and a Pause on Loans
Under the shutdown plan put forth by the U.S. Department of Agriculture (USDA), 67 percent of Farm Service Agency (FSA) employees have been furloughed. The office has also stopped processing farm loans and commodity payments. Nearly all of the Natural Resources Conservation Service staff, already reduced earlier this year through mass layoffs, were furloughed.
Farmers with Environmental Quality Incentive Program (EQIP) grants or similar federal projects are left without any agents available to review completed or nearly complete projects—a necessary step prior to receive funding.
Mark German loads soybeans from grain bins into a truck so they can be hauled to an elevator and sold in August, prior to the government shutdown. Many farmers now worry that a lack of loan services will increase financial stress. (Photo credit: Scott Olson/Getty Images)
Wells, who is also the vice president of agriculture loans at First National Bank in Paragould, said loans are the most troubling problem. With the government closed, farmers can’t access loans through the Commodity Credit Corporation (CCC), a program created to stabilize farm income and prices. These marketing-assistance loans, which are administered through the FSA, allow large-scale commodity farmers to use their crops as collateral and sell their harvest when crop prices are more favorable.
Many commodity farmers are now completing the harvest season. Typically they can apply for a CCC loan from the local Farm Service Agency to offset operating costs or pay other loans that are set at a higher rate. With the current high supply and low price for commodities like corn and soybeans, many farmers will need CCC loans to cushion costs and have more time to market their products. But with FSA offices closed, these loans are currently inaccessible.
“Commodity Credit Corporation loans allow us to pay down some debt and then give us some flexibility to market our crop at a later date.”
Walt Bone, a fourth-generation farmer in South Dakota and former state agriculture secretary, said the shutdown won’t impact his family’s actual soybean and corn harvest. Instead, he echoed Wells’ concern that he and other farms won’t be able to obtain CCC loans.
“It allows us then to pay down some debt and then gives us some flexibility to market our crop at a later date,” he said.
With the government shut down, farmers are missing out on other federal support.
Two years ago, for example, Bone received EQIP grants through the National Resources Conservation Service, a USDA agency, to add water tanks to cattle pastures. This year, he was able to extend that system and add more tanks to additional pastures. He’s been billed for that latest extension, and said he’s banking on the USDA being able to hold up its end of the deal and repay the farm. But that payment won’t come until the shutdown ends.
