AMI: GIPSA Proposed Rule Not Good For Ag Industry, Says Ag Lender

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Although the Congressionally mandated purpose of the U.S. Department of Agriculture is to strengthen America’s agriculture industry and revitalize rural communities, a rule proposed by the Grain Inspection, Packers and Stockyards Administration (GIPSA) suggests that USDA has lost sight of its mission, according to an op-ed by Mark Greenwood, vice president of agribusiness capital at AgStar Financial Services in Mankato, Minn.

In the op-ed, which appeared recently in the St. Cloud Times, Greenwood provided a unique perspective on the proposed GIPSA livestock and poultry marketing rule, noting that the livestock industry has seen historic volatility in recent years, making difficult for ag lenders like himself to provide critical operating capital to these farmers. Marketing agreements, he said, make it possible to do business.

“Without these agreements, the livestock market is simply too volatile for most lending organizations to risk financing. Current use of marketing agreements actually helps new farmers build the credit they need to become long-term contributors to the industry and their local economy,” Greenwood wrote.

“Like the broader U.S. economy, access to capital is a critical factor that will determine how the food and agriculture industry will emerge from this recession. Limiting the ability of the nation’s livestock producers to use a proven risk-management tool to secure operating capital will limit the ag industry’s expansion potential at a time when our country desperately needs more opportunities,” Greenwood added.

Greenwood pointed to the recent study conducted by John Dunham and Associates for the American Meat Institute which estimates 104,000 jobs will be lost if the proposed USDA rule is finalized.

“As American consumers, I urge you to contact your lawmakers and the USDA and push for the USDA to evaluate the impacts of this proposed policy, conduct due diligence and make the right decision for the ag economy and the overall U.S. economy,” Greenwood concluded.



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