In a rare joint appearance, Kansas Sen. Pat Roberts, chairman of the Senate Agriculture Committee and Texas Sen. Mike Conaway, chairman of the House Agriculture Committee, took the stage together at the Kansas State Fair on Saturday.
In the annual WIBW-Radio Ag Issues Forum on the first Saturday of the fair, the Congressional leaders joined Kansas State University ag economist Allen Featherstone to talk about something on the minds of many, many fairgoers: the deepening financial crisis in the ag industry.
Roberts and Conaway agreed that exports are key to the prosperity of American agriculture and that trade agreements are essential in winning the competition for export markets. But they also agreed that there is little chance the Trans-Pacific Partnership agreement will be ratified in 2016.
Questioned by reporters after the forum, Roberts said that he believes he can use his role as an agricultural adviser to Republican presidential nominee Donald Trump to convince him to change his mind about supporting at least the agricultural portion of the agreement in spite of the fact that Trump has made opposition to trade agreements a key component of his campaign.
Roberts said the TPP and other trade agreements are essential to agriculture.
"Right now, Australia is selling wheat and beef for Japan. We need to be selling in that market. If we don't get this done, we're going to see China moving for that market. The door is open. We have a lot of work to do, and we will never get this deal done without strong leadership from the President."
Conaway said production agriculture did "a great job of staying at the table and getting the job done" in crafting a good deal for agriculture in the TPP. And he encouraged producers to remain positive about seeing it completed.
"We can't just close our borders and trade among ourselves and succeed," he said. "We are able to produce far more than we can consume. One-third of every acre of American production has to go somewhere. And right now, it's going on the ground."
Congress's ability to help in the crisis
On the question of what Congress can do to help farmers and ranchers weather the current crisis, Roberts was quick to point out that today's producers are in a far better position that they were during the crisis of the 1980s when interest rates were through the roof and many producers were heavily in debt.
"First, we need to make sure that Congress does no harm," Roberts said. "Our role is to use every tool we can to help farmers make it through this."
However, he said, he does not want to see any portion of the Farm Bill re-opened.
"The minute you do that, you open up the whole thing to change and there are unfriendly interests that will be in there right away. What we don't need to do is try to fix today's problem and inadvertently screw up the future."
Featherstone said that as an economist his greatest concern about the crisis farmers face this year is making sure that credit remains available to those who need to borrow.
"I am very concerned about regulations that hurt the ability of local community banks to work with farmers," he said. "I am especially concerned about our younger producers who got started in the last five to 10 years and they have not had the experience of working through a downturn of this magnitude. We need to have a structure aimed particularly at working them and bringing them through this."
Conaway, who worked in banking for six years before running for public office, said he is concerned, not just about the consolidation in the banking industry that has been going on for decades but about the regulations that make it very difficult for new start-ups to move in and service the needs of customers at the local level.
"One of the big thing in the Consumer Finance Protection Bureau that is part of Dodd -Frank," he said. "This was supposed to be a check on the big banks but it has had a disproportionate effect on small banks."
A critical backstop for community banks to help them continue to offer credit to farmers is the Federal Service Agency's loan guarantee program. That was the subject of another question.
Conaway said the program is critical to helping farmers through tough times and noted that it is obviously useful because its resources for this fiscal year have already been depleted. He also noted that community banks have told his office that they would like more timely decisions on approvals of loans from the FSA.