National Farmers Union (NFU) yesterday commended U.S. Agriculture Secretary Ann M. Veneman for her decision to not lower commodity loan rates at this time. Additionally, the family farm organization said Veneman should take the next step and pledge that loan rates will not fall below 2001 levels in the absence of a new farm bill.
"We encourage Secretary Veneman to exercise the authority given to her in the 1996 FAIR Act and announce that current loan rates will be maintained," NFU President Leland Swenson said. "American farmers need this certainty and stability."
Under the 1996 Federal Agriculture Improvement and Reform (FAIR) Act, loan rates for wheat, corn and soybeans could be lowered significantly under the secretary’s discretion.
Although the agriculture secretary does not have authority to increase loan rates, she does have authority to prevent formula-based reductions provided in the FAIR Act, Swenson said. In recent years, former Secretary Dan Glickman had utilized this authority to maintain loan rates that would have otherwise declined under the farm bill.
The marketing loan program provides producers with much-needed income support and is an important source of short-term financing during times of economic stress, Swenson said. In addition, the marketing loan is the basis for much of the commercial credit utilized by producers each year to produce, harvest and market their crops.
In a letter to Veneman late November 2001, the National Farmers Union board of directors urged the secretary to announce that the commodity marketing assistance loan rates for 2002 program crops would be maintained at current levels in the absence of new farm legislation. At that time, many producers were already seeking financing for 2002 crop production.