Group asks FSA to suspend loans to specialized facilities

Wednesday, October 21, 2009 | 12:01 a.m. CDT
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Less than 12 percent of the Farm Service Agency’s guaranteed loan program was leant to borrowers for the building and expansion of specialized pork and poultry production operations.

COLUMBIA — A Missouri grassroots farm organization is part of a group asking the federal Farm Service Agency to stop giving loans to the kind of specialized facilities that are often used by factory farms.

More than 25,000 people signed a letter delivered to the U.S. Secretary of Agriculture.

The Missouri Rural Crisis Center supports the effort to stop the Farm Service Agency from lending to producers wanting to build or expand these facilities. The center says that such loans promote overproduction and decrease prices, which has led to less profit for pork farmers. 

In the past seven months, the federal government has bought $55 million pounds of surplus pork.

"This cycle of promoting the expansion of corporate livestock production with taxpayer money, then bailing out the industry because of overproduction with taxpayer money, is an irresponsible practice and must come to an end," Missouri Rural Crisis Center spokeswoman Rhonda Perry said via teleconference.

She said new facilities are not justifiable in an industry that struggles to be profitable.

Dan Gieseke, farm loan program chief, said that in the current market, the Farm Service Agency takes a critical look at any application for new construction or expansion.

"We want people to be able to pay back their loans,” he said.

Don Nikodim, executive vice president of the Missouri Pork Association, said he doesn't know of any Missouri pork farmers trying to get a loan to expand their operation.

"They are just trying to get loans to stay afloat and feed their families now," he said.

Nikodim says that cost, rather than overproduction, is the biggest factor influencing pork farmers' struggle to make a profit. Increased corn and soybean prices have played a major role in the squeeze on pork farmers.

Ray Massey, a MU agricultural economist, said even if loans for new construction for hog facilities are suspended, it will likely not affect the price of pork for a year.

"A pig born yesterday will not make it to market until six months from now," he said. "These things take time."

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