A3O-Lancaster Fanning, Saturday, May 5,1990 Ag Lenders Meet, Discuss Issues VERNON ACHENBACH JR. Lancaster Farming Staff UNIVERSITY PARK (Centre Co.) Political and legal ramifi cations of environmental and banking issues on the state’s agri cultural economy were the focus of much discussion during a two-day seminar held here recently for agri cultural lenders and others inter ested in agriculture lending. The program, co-sponosored by the Pennsylvania Bankers Associ ation (PBA) and Penn State Uni versity (PSU), was designed to inform agriculture lenders on cur rent issues, what they mean or could mean, and what kinds of effects they may have on agricul tural economy. About 75 people attended the function held in the PSU J.O. Kell er Confemce Center. Louise Rynd, general counsel for the Pennsylvania Bankers Association provided a state-level legislative update to the group. “We have to face the unpleasant fact that the Congress in Washing ton and the legislature in Pennsyl vania have a great deal to say about how lenders make loans,” Rynd said. “We’re not the only industry affected by legislation, however. In fact, we’re in good company. The existence of so many interest groups, though, makes it even more difficult to got the legislature to focus on concerns of the bank ing industry, farming, environ mental groups or any other interest for that matter,” she said. According to Rynd, more than 4,000 different pieces of proposed legislation were introduced during the recent session of the state Gen eral Assembly. She said politically-favored issues such as auto insurance reform and abortion restrictions captured the attention and time of both representative bodies and made it difficult to further legisla tion favorable to the state banking industry. She said consumer credit simp lification has been one of the top priority issues of the PBA during this past session. However, the environmental and farming concerns of the PBA are primarily focused on wetlands protection legislation. “The issue of wetlands protec tion is shaping up as a controversy this session,” Rynd said. “Pennsyl vania has 500,000 acres of wet lands which provide flood protec tion and help purify drinking water supplies. “Sen. Roger Madigan . . . recently introduced Senate Bill 1326 to establish a state wet lands protection program and a ‘Pennsylvania Wetlands Trust’ which would acquire property rights by gift or purchase,” Rynd Standard Gang Slata. rrwS&i /r h? Performance and Economy. OM® C?M3lr 4'xS', 4'xS', 4'xB’ or 4’xlo said. “His stated goal in introducing this bill is to protect wetlands, but balance that need against the land owner’s diminshed potential to use his land,” she said. She said that reports are that some environmental groups oppose the legislation because of some compensatory inclusions. The Pennsylvania Farmers Association has made public that it fears certain wetlands protection issues, because of possible nega tive impacts to existing tillable land, Rynd said. “The Pennsylvania Bankers Association has not taken a posi tion on Sen. Madigan’s bill,” Rynd . . what you thought was valuable farm land securing your loan is suddenly worthless because a cattail was spotted growing there.’ said. “The arguments on both sides are persuasive. From a lender’s perspective, there is certainly nothing more threatening than learning that what you thought was valuable farmland securing your loan is suddenly worthless because a cattail was spotted growing there,” she said. According to Josh Tenuta, a Washington lobbyist with the American Bankers Association, the 1990 Farm Bill is moving only in House subcommittee. He said the Senate is not doing anything to further work on the bill. He said that he felt many envir onmental issues were going to be eliminated in the final draft and end up being argued on the floors SETTING THE TREND wm Penning ■ 100% Solid Steel Fence ■ Easy Open Gates ■ Extra Large Floor Plates ■ Wet Cast Gang Slats ■ Hand Finished Stocking fa V' ouautv INSTALLATION CONFINEMENT SYSTEMS INC. ■ Solid Steel Front Arch Farrowing Crate ■ Round Bottom Stainless Steel Sow Feeder ■ Stainless Steel Feeders ■ Aerotech Efficiency ■ Patent Feed Gate Design Fans & Shutters Quality Hog Equipment ■MWh mm WMb T 608 Evergreen Rd. Lebanon, PA 17042 PH: 717-274*3488 CONFINEMENT SYSTEMS, INC. Hours; Mon.-Frl. 7:00 to 4:30 Sot. 8:00 to 12:00 of both the House and Senate, because pro-environmentalism is such a politically adventageous position. According to Tenuta, being an environmentalist is “in” among legislators, but that most have no idea what nature and ecology is about. However, he said he felt that in regards to many issues, legisla tor would probably vote fashion ably in order to stay in good graces with a vocal constituency and wor ry about the consequences later. Tenuta also warned of problems brewing within the farm credit world, especially in the Mid-West. He said officials suspect poor lending practices by the Farm Cre dit System, and are requesting any information to document cases. Government-sponsored lenders are reportedly resorting to the types of lending practices that led to the huge farm problems of the earlier 80s, in which many farmers lost their businesses, Tenuta said. He added that certain factions of these lending institutions are also allegedly seeking to make loans outside of their intended perview. According to Tenuta the eco nomics division of ABA “is look ing into the whole issue of unsafe and unsound lending practices . . . “A lot of questions are being asked about it on the Hill,” Tenuta said. “I don’t know that it’s hap pening particularly in Pennsylva nia. I know it’s happening in a great extent throughout the Mid- Wesl. We’re hearing incidences of Farrowing Crate 3W 5 4306518 it in the South and in the West. He said the Farm Credit System is politically active in seeking to expand their lending authority. "They want to move away in direc tion from what was basically under their charter for moving into credit areas that was given to them through the 1930 s where there wasn’t credit for long term real estate," Tenuta said. According to the lobbyist, there are people with written amend ments to expand the perview of Farm Credit System lending authority. He said these people with these proposals are waiting in the wings for an opportunity to bring them foward. ‘They would like to expand their lending authority in many areas,” Tenuta said. “They would like to ... expand their entire commercial lending authority to both on-farm and off-farm rural areas; effectively compete with you (commercial banks) day in and day out in all aspects of rural lending.” Some political support exists on the Hill for such a move, Tenuta said. He said the thinking is that “the problem in rural America is that there’s not enough credit available out there. When, really, the issue and the focus of it has a lot more to do with the equity side of that whole equation.” He said that ag lending and rural lending are a “very serious priori ty” with the ABA, “We are finding in many areas that cases are that the Farm Credit system is not even lending in the rural communities in which they are chartered to lend, they are looking to move outside of those realms. That’s an area we’re working on,” Tenuta said. In other business, farm lending (Turn to Page A 32) Gestation Crate ■ Solid Steel Stalls ■ Optional Drop Feed Tubes ■ Concrete Feeding & Watering Troughs Available
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