With proposed rule, livestock market would be too volatile for most lending organizations to risk financing.
Although the Congressionally mandated purpose of USDA is to strengthen America’s agriculture industry and revitalize rural communities, a rule proposed by the Grain Inspection, Packers and Stockyards Administration (GIPSA) suggests that USDA has lost sight of its mission, according to an op-ed by Mark Greenwood, vice president of agribusiness capital at AgStar Financial Services in Mankato, MN.
In the op-ed, which appeared recently in the St. Cloud Times, Greenwood provided a unique perspective on the proposed GIPSA livestock and poultry marketing rule, noting that the livestock industry has seen historic volatility in recent years, making it difficult for ag lenders like himself to provide critical operating capital to these farmers. Marketing agreements, he says, make it possible to do business.
“Without these agreements, the livestock market is simply too volatile for most lending organizations to risk financing. Current use of marketing agreements actually helps new farmers build the credit they need to become long-term contributors to the industry and their local economy,” Greenwood writes.
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