Capital for agriculture and rural America: redefining the federal role

U.S. agriculture depends on capital for its success. Nearly a trillion dollars of capital is at work in production agriculture, with trillions more at work in the rest of the U.S. food system. Public policy has always been concerned with ensuring that farmers have access to adequate amounts of capital at competitive terms. But as is true for many other parts of agricultural policy, substantial changes in the industry now call into question both the degree and type of policy intervention that have been undertaken in the past.> The United States has a highly efficient market for agricultural credit. In many respects, it is a model market for the rest of the world. The agricultural credit market provides ready amounts of credit to farmers, at competitive rates, on terms that suit their unique needs. Without question, public policy has helped to develop this efficient market. But now that it operates smoothly the question is, what should be the public role in the future?> In this article, based on testimony before the Senate Committee on Agriculture, Nutrition, and Forestry in March of this year, Drabenstott concludes that while there may be less need today for a federal government role in agricultural credit, there may be more need to pay attention to rural credit in the future.