ABA Statement for the Record Farm Bill 2023 Commodity Programs Crop Insurance and Credit

Chair Stabenow, Ranking Member Boozman, and members of the Committee, the American Bankers Association (ABA) would like to thank you for holding this hearing on Farm Bill 2023: Commodity Programs, Crop Insurance, and Credit.

The American Bankers Association is the voice of the nation’s $23.6 trillion banking industry, which is composed of small, regional, and large banks that together employ more than 2 million people, safeguard $19.4 trillion in deposits and extend $12 trillion in loans. ABA is uniquely qualified to comment on agricultural credit issues as banks have provided credit to the agriculture industry since the founding of our country. Nearly 4,000 banks — 80 percent of all banks nationwide — reported agricultural loans on their books at year-end 2021 with a total outstanding portfolio of more than $179 billion, or approximately 40% of all agricultural credit in the U.S. in 2021. Small loans continue to make up almost half of banks’ farm and ranch lending with $69 billion in small and micro farm and ranch loans on the books at the end of 2021.

Banks continue to be one of the first places farmers and ranchers turn to when looking for agricultural loans. Agricultural credit portfolios typically finance a wide array of customers, including large and small farms, urban farmers, beginning farmers, and USDA-defined historically underserved farmers, which include women and minority farmers and ranchers. To bankers, agricultural lending is good business and credit is available to those who can demonstrate a sound business plan and the ability to repay.

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