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May 6, 2025 by Rob Nichols is president and CEO of the American Bankers Association as it appeared in Agri-Pulse
As I've gotten to know many of our country's finest ag bankers over my 10 years as president and CEO of the American Bankers Association, I've seen firsthand their dedication to this vital sector, and the incredible depth of expertise they bring--not just in banking, but in their understanding of the intricacies and complexities of the ag economy. Like the farmers and ranchers they serve, ag bankers are tough--they're no strangers to adversity, and they're used to operating in a highly uncertain environment. They're also straight shooters--they tell it like it is. The message coming from ag bankers right now could not be clearer: America's ag economy is struggling. Faced with a protracted period of high interest rates, persistently low commodity prices, high input costs, and uncertainty around ag exports given trade tensions, many farmers and ranchers who were already surviving on the margins are now facing lower cashflows and more difficulties making ends meet. Everyday American consumers are feeling it, too--a recent survey by ABA and Morning Consult found that nearly three in four consumers are concerned about the financial well-being of the ag and rural economies. It's time to give rural America a hand. Fortunately, there's a bipartisan solution in Congress that can help: the Access to Credit for our Rural Economy Act, or ACRE. Long championed by ABA, state bankers associations and our member banks, ACRE was created to help lower the cost of credit for farmers, ranchers and homebuyers in rural communities without creating new government payments or programs. Specifically, ACRE exempts interest income from federal taxation on loans secured by agricultural real estate and rural homes in communities with under 2,500 residents--delivering meaningful relief to 30 million Americans and lowering the cost for U.S. producers to finance farmland by 1 to 1.5%. For a grower purchasing farmland at $10,000 per acre, that amounts to savings of about $100 to $150 per acre--which can be the difference between being profitable or not. Related Articles Opinion: How Congress Can Send Much Needed Capital to Rural Communities To Mitigate Financial Fallout From Pandemic Opinion: How rural communities are stepping up to provide assistance during the pandemic Opinion: Congress should strengthen rural access to broadband for communities to utilize telehealth services Take it from a real ag banker: Caleb Hopkins, who chairs ABA's Agricultural and Rural Bankers Committee, recently closed a loan for a beginning Iowa farmer for 155 acres of mixed-use farmland. The bank financed 50% of the total purchase price of $1.12 million with a Farm Service Agency guaranteed loan with a fixed 30-year rate of 6.55%. Were ACRE in place, it would have shaved an estimated 100 basis points off of that loan rate, saving the borrower almost $4,400 per year on just the bank's portion of their loan. For a farmer just starting out, this kind of savings can make a critical difference. ABA and our member banks stand ready to work with Congress to enact this important legislation as soon as possible. It's a simple, targeted solution that would bring real savings to rural borrowers, expand access to credit and support the continued vitality of the communities that feed and fuel our nation. To read the entire op-ed click here. Tweet |
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