Academic journal article ABA Banking Journal

Farm Bankers Forecast an Iffy Future

Academic journal article ABA Banking Journal

Farm Bankers Forecast an Iffy Future

Article excerpt

Ag banking may be facing grim times in the long term, according to a poll of farm lenders taken during ABA's National Agricultural Banker Conference last fall.

Almost two-thirds 65%--of the 246 bankers responding to the poll said there was an inadequate number of beginning farmers in their markets. Only 29% of the bankers felt there were a satisfactory number of potential new customers in the pipeline.

Concern over rural development was the top issue for ag banking cited by 22% of the bankers--only concern about bank's regulatory burden ranked higher in the minds of those bankers responding.

"The decades-long decline in the number of family farms has left an ominous shadow hanging over many small towns," observed Darcy L. Myers, chairman of ABA's Agricultural Bankers Division and vice-president at Norwest Bank Denver, Colo.

While these are longer-term concerns, bankers painted a mixed though somewhat pessimistic view for the near term as well. Nearly all said there was sufficient agricultural credit available in their markets. However, 56% said the number of creditworthy borrowers in their locales had decreased in 1994; only 27% reported an increase, with the remaining 17% saying they were unsure.

A little more than half--53%--of the bankers expected to have more customers during 1995 than in 1994. Another 31% expected to have fewer customers in I995 and the remaining 16% weren't sure.

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So ABA wrote in a comment letter on a joint rule proposed by the Department of Housing and Urban Development and the Environmental Protection Agency. The proposal covers parties selling or leasing residences built prior to 1978. With certain exceptions, the sellers or lessors would have to provide prospective buyers with lead-hazard pamphlets; disclose any know 'n lead-paint hazards; and, in the case of sellers, permit the buyer or tenter to have the property inspected.

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