Part 3 of the Madville Times' South Dakota State Fair Congressional Debate analysis
Question #2 in Sunday's Congressional debate: What do you plan to do to help the current ag lending situation? Had I faced this question, I'd have been left hemming, hawing, and deferring to our Congresswoman just as B-Thom did. I'll see if I can get right what the ladies in the race had to say:
Stephanie Herseth Sandlin said she discussed this very issue with dairy producers on Saturday and called for changes in the Commodity Credit Corporation. She said farmers should be allowed to count silage in collateral value. The Congresswoman said we need to make sure Farmer Mac and cooperative lending institutions don't get caught in regulatory burdens that should properly be aimed at the Wall Street fatcats who swamped the economy. She said she worked with House colleagues to make sure this summer's Wall Street reform act carried such exemptions. Herseth Sandlin mentioned her work on expanding financing opportunities for young farmers and ranchers (I didn't catch mention of a specific bill; Herseth Sandlin did sponsor the Beginning Farmer and Rancher Opporunity Act of 2007, though that didn't make it out of committee).
Herseth Sandlin then branched a bit with some indirect solutions. She noted that she has supported renewable energy, ethanol, wind power, and community wind projects (hey! she said community wind! Whoo-hoo!). Expand those programs, and you expand the ability of farmers to diversify their portfolio, which in turn expands their potential for cash flow and ability to get loans from the bank.
Kristi Noem started her answer by recycling an earlier talking point about the need for permanent disaster relief. Noem said disaster payments need to come the year of the disaster, not later, so farmers can get the cash flow they need to get loans for the next planting cycle. She said we shouldn't limit producer abilities to look at forward contracts and get premiums for the product they produce.
Noem then turned to foreign trade. She said the House has had three opportunities to approve trade agreements with other countries but has failed to take action.* Noem said we must open up trade to get good markets for our crops, which boost cash flow, which make it easier to get financing. She then started to say something about the Wall Street reform bill, but her answer ran over the time limit.
Assessment: Both candidates offered some Rube-Goldberg economics. Help farmers make money in other ways, and they'll have more collateral to get more loans? I guess that makes sense, although I would speculate the questioner was thinking more about the complications the farmer faces with paperwork, interest rates, tax rules, etc., the aspects of the lending process that Congress can change directly. On that line, Herseth Sandlin provided more direct solutions. Advantage Herseth Sandlin on substance.
*In response to a later question on unemployment, Herseth Sandlin pointed out that Noem was blowing smoke on these trade agreements. Herseth Sandlin says the three agreements Noem references (apparently with South Korea, Colombia, and Panama) have not yet been transmitted by the President to the Congress, meaning Congress has never had a chance to vote on them. President Obama wants these deals done, but the agreements, negotiated by the Bush Administration in 2007, have been stalled by Democratic opposition in Congress.
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