Iowa Deputy Secretary of Agriculture Grant Menke today testified before the U.S. Senate Committee on Small Business and Entrepreneurship. At the invitation of Committee Ranking Member Sen. Joni Ernst (R-Iowa), Deputy Secretary Grant Menke testified on behalf of Secretary Mike Naig, who is in India on a trade mission.
The purpose of the hearing was to explore and address disparities, discrepancies and inequities between disaster recovery programs administered by the Small Business Administration (SBA) and the United States Department of Agriculture (USDA).
Deputy Secretary Menke’s opening statement, as prepared for delivery, is as follows:
“Good afternoon, Chair Shaheen, Ranking Member Ernst, and members of the Committee, and thank you for the invitation to testify today.
My name is Grant Menke, and I serve as the Deputy Secretary of Agriculture for the State of Iowa. I am here today on behalf of Iowa Secretary of Agriculture Mike Naig, who is currently on a trade mission to India with Iowa Governor Kim Reynolds. He wishes he could be here, but I am pleased to share his perspective and that of numerous Iowans in the ag community who have spent the last few months recovering from devastating and costly natural disasters.
Agriculture drives the economy of Iowa. It is our state's number one industry. Consumers near and far depend on the productivity of Iowa agriculture, and our multi-generational family farms and ag businesses are proud of this fact.
Unfortunately, many of these same family farms were devastated by a series of weather disasters earlier this year. While our historic drought of 204 consecutive weeks was finally busted, this growing season unfortunately produced historic flooding and a record number of tornadoes in Iowa.
Secretary Naig spent many days on the road this spring and summer visiting farms, businesses and communities that were hit hard. In many cases these folks lost nearly everything – not just farm buildings and equipment – but also their homes.
Secretary Naig relayed the story of a man from a century farm in southwest Iowa. This farm had been in the man’s family for more than 100 years, and they lost everything in a devastating tornado. This farmer was clearly feeling the pressure and responsibility for his farm and the legacy it represents. He was thinking of generations past, but also of generations to come. Despite his world being turned upside down, he relayed to Secretary Naig his determination to turn the page, rebuild, and start the next chapter of his family farm story.
But as these farms have moved forward, they’ve encountered challenges.
Like any small businesses with significant equipment, infrastructure and operating costs, these farms carry property and casualty insurance. They also rely on risk management programs authorized through the Farm Bill, including crop insurance. Yet, there are still significant gaps, especially during this time of persistent inflation. That’s why farmers and farm businesses have needed to turn to disaster programs offered by USDA and SBA to access the capital needed to continue operations.
Through this disaster recovery process, Iowans have discovered that there are several frustrating and confusing disparities between these programs, and it is our hope that this committee can begin the process of addressing these inequities.
In addition to the overall complexity of these federal programs, one of the most significant issues Iowans have faced is the disparity in accessibility and eligibility between USDA and SBA disaster programs. Since farmers are not eligible for SBA disaster programs, these differences have been especially difficult for farm families.
For instance, SBA disaster loans typically offer more favorable terms, including higher loan limits, lower interest rates and longer repayment terms than USDA disaster loans. SBA disaster loans also offer deferral of the first payment and no interest accrual for the first 12 months – features that are not available with USDA disaster loans. These discrepancies place an undue burden on farmers and farm businesses who already operate on thin margins, especially amid the softening ag economy.
To address these inequities going forward, we encourage you to align the eligibility criteria, loan limits, terms and conditions for SBA and USDA disaster programs to ensure that all affected farmers and farm businesses can access the support they need without unnecessary barriers.
Due to gaps in the current USDA disaster programs, the State of Iowa has already taken action to provide some immediate relief to Iowa agriculture. The new Disaster Recovery Farm Interest Program, announced by Governor Reynolds on July 11, 2024, offers farm businesses up to $50,000 of reimbursement for one year of scheduled interest payments owed on eligible loans that farmers will use to repair or replace damage on insured property. This program essentially aims to align emergency ag loans with the same one-year deferred-interest financing offered by SBA. A similar solution is needed at USDA to ensure that assistance is available for farmers in Iowa and other states facing similar hardships.
We should all be inspired by the optimism, determination, and fortitude of the farmers and farm businesses in Iowa and around the country who have weathered these storms and natural disasters. Family farms are essential to the vitality of our rural communities and economies. They are the heart of agriculture and essential to making the U.S. a global ag production powerhouse.
Through common-sense reforms to USDA and SBA disaster programs, we can ensure that those farms affected now – and in the future – can receive the help they need to recover, rebuild, and write the next chapter of their family farm’s legacy, which will, ultimately, contribute to the greater story of U.S. agriculture.
Thank you for your time and consideration, and I welcome your questions.”
A complete video of the hearing will be available on the committee’s website.
Source : iowaagriculture.gov