Washington, D.C. —- Congressman G. K. Butterfield is urging President Obama to provide family farms with protections as part of the Troubled Assets Relief Program (TARP).
This week Butterfield wrote to President Obama to urge the Administration to require lending institutions receiving TARP funds to allow farmers to restructure loans when farmers are unable to make scheduled payments due to circumstances beyond their control, such as the current severe economic downturn.
“Family farmers play such an important role in our local and national economies, and as we work to rebuild our economy it is vitally important that we do all we can to keep these families on their farms,” Butterfield said. “This would provide a critical protection because most family farmers live on their farms, and their homes are often used as security for farm loans.”
Butterfield said such regulations would extend loan protections to family farmers in ways that compare to those already mandated for Farm Service Agency (FSA) farm loans, and it would prevent home foreclosures and bankruptcy among farmers and ranchers. In addition, loan restructuring mandates would not require an investment from the federal government and would prevent banks from losing funds as a result of foreclosure and loan default.
“As we look ahead this year, farming families face a great number of challenges and uncertainties,” Butterfield said. “The global financial crisis, economic recession, rising unemployment, limited credit availability and plummeting asset values are all contributing to a severe weakening of consumer demand and could jeopardize the long-term viability of farming.”
Butterfield noted that agriculture is a critically important part of the American economy. For 2008, the agriculture sector is projected to have contributed more than $130 billion to the economy. Estimates also indicate that this sector employs 14 percent of the total workforce and accounts for nearly 5 percent of the total U.S. gross domestic product.
The Treasury Department is currently considering new rules to improve TARP, and those rules are expected to be announced soon.