Some of the top farm credit officials in the nation are worried about the impact of the ongoing drought on the farm and financial sector.
With drought conditions nationwide showing no sign of letting up, financial and credit officials are worrying about the health and vitality of the farm sector, with the heads of the Farm Credit Administration worrying in particular about rising interest rates and noting that agricultural conversations are beginning to dominate financial conversations in Washington.
According to Leland Strom, chief executive officer at the FSA, “This has a potentially longer term impact because of that 3, 4, 5 percent rise in food prices. I don’t think it’s very often that Treasury officials talk inside the halls of the Treasury about agricultural issues every day. But I think they are doing that right now.”
Strom and others are worried that the ongoing drought, and the government’s response, could adversely affect the farm economy. The previous farm boom was largely fueled by increased ethanol production, increased farm exports, and low interest rates. Strom argued that if Congress, which only has about 13 legislative until the presidential election, fails to pass a new farm bill, then interest rates could increase, exports decrease, and the farm economy and the financial sector could suffer, potentially jeopardizing long-term economic recovery.
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Written by: Justin Ellison / Farm Plus Staff Writer