Despite this year’s severe drought farmers and ranchers who have partnered with their banker on financial decisions have a steady foundation from strong performance throughout recent years. American Bankers Association President and CEO Frank Keating says the banking industry recognizes how important agriculture is and wants to help farmers and ranchers in the best way possible.
“Sit down with your banker and make sure that you talk about your plight,” he said. “There are opportunities for crop insurance. There are opportunities for renegotiation of loans, adjustment of loan payment terms, rescheduling or deferral of payments. This is what bankers do and if you have an ag bank you’re dealing with, that’s how they stay in business, by dealing with you. There’s no banking if you don’t make loans and there is no production agriculture if you can’t borrow money. So it is a partnership relationship. There just needs to be conversation that this drought will obviously necessitate in many areas of the country.”
Keating says the time to have that conversation is now to make sure farmers and ranchers continue to make wise financial decisions during this time.
“The bank wants to make sure that the borrower can pay them back, but wants to make sure that the borrower remains in production agriculture for generations to come. To sit down with your bank and work through this challenge is the right thing to do because it will rain again and there will be prosperity down the line. Banks don’t want to write off loans and seize collateral. I mean that doesn’t help them at all. They always lose money in that environment.”
Keating added, “People shouldn’t just change the channel, close the door, pull down the blinds, and say I don’t want to talk to my lender. They need to when they think there’s an issue or problem. Sit down with your banker. He’s your partner anyway and make him your best friend.”
Farmers and ranchers must be focused on their finances, Keating says, because family farms and production agriculture are the cornerstone of the United States’ food security.[audio:https://www.hoosieragtoday.com//wp-content/uploads//2012/09/Frank-Keating-on-ag-lending.mp3|titles=Frank Keating on ag lending]
Source: NAFB News Service