A Failure of Congressional Leadership
Congress fails to support Farm Credit agenda

by Bill Lipinski, president and CEO

What do you think of Congress’s performance? A mid-October CNN poll indicated that 75 percent of Americans disapprove of the manner in which Congress is doing its job.

I’m with the 75 percent. Our experience with the 2007 Farm Bill has provided a close-up view of how Congress works, and it has been a most discouraging experience.

As I sit here today in early November, it looks like the Farm Credit System will get very little, if anything, in terms of modernized authority in the 2007 Farm Bill. It has not been for lack of trying.

In 2004 to 2005, the System undertook a massive research effort to evaluate the financial needs of agriculture and rural America called HORIZONS. From that came a Farm Bill agenda of modest changes in lending for agribusiness and rural housing.

We spent 2006 taking our initiative to customers and other farm organizations. Your feedback was very positive and we greatly appreciate the support of virtually all major farm organizations and state departments of agriculture in our six-state service area.

A key part of the proposal would enable Farm Credit to finance agricultural input providers and farm marketing and processing that farmers depend on.The Northeast agricultural infrastructure is very important to the region’s agriculture.

In the House of Representatives this past summer and recently in the Senate, we found very little support for even these modest proposals to modernize our lending authorities. I am truly disappointed as to the explanations for why our proposals have not been advanced.

I am told that Congress is reluctant to take action unless there is a crisis, and clearly that does not exist in agriculture today. That excuse sounds like crisis management — a concept that most would agree is no way to run a business … or a country. It’s why problems like immigration reform, health care and subprime lending become so complicated and difficult to solve.

“… I have not heard substantive discussion debunking the merits of our proposals …”

I am told that many representatives or senators like what Farm Credit is doing and would like to support us, but do not want to have a recorded vote in which they have to choose between commercial banks and Farm Credit. That’s what leadership is about in my book — taking a position and being accountable for it. By not advancing our modest proposals, Congress has clearly come down in support of commercial banking interests.

I am told that there is a reluctance to do anything that would alter the competitive balance between the commercial banking system and the Farm Credit System. Does any reasonable person really believe that the Farm Credit System, with its authority to specialize in lending to less than 1 percent of our nation’s economy, is a competitive threat to a banking system that can provide full banking services to 100 percent of the U.S. economy plus the rest of the world?

In all of this I have not heard substantive discussion debunking the merits of our proposals, which are consistent with Congress’s mission for the Farm Credit System. There is no good argument as to how these proposals might be unsound for borrowers, Farm Credit cooperatives or the government. Directors, customer service council members, customers, employees and friends around the Northeast have made phone calls and written letters on our behalf. Thanks for your important show of support.

Regardless of the final outcome in Congress, you can expect the First Pioneer leadership team to continue to be proactive and creative in serving our evolving market here in the Northeast.

Members of Congress
While disappointed in the overall Congressional support, we appreciate the efforts of many Northeast members:

• Senator Patrick Leahy (VT)
• Congresswoman Kirsten Gillibrand (NY)
• Congressman Randy Kuhl (NY)
• Congressman John McHugh (NY)
• Congressman Richard Neal (MA)
• Congressman Peter Welch (VT)
• Congressman Thomas Reynolds (NY)
• Congressman Michael Arcuri (NY)
• Congressman Jim Walsh (NY)
• Congresswoman Louise Slaughter (NY)

This letter appeared in the Winter 2008 issue of Financial Partner (F.P.) magazine, First Pioneer's customer publication. Click here if you would like to start receiving FP magazine in the mail.

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