COMMODITY GROUPS URGE USDA TO STEP UP TO AG EQUITY CRUNCH

Temporary loan guarantees encouraged

  With rural businesses and producers dealing with an increasing liquidity crisis, most of the nation's major commodity groups are calling on Secretary of Agriculture Ed Schafer to help stave off future compounding of the situation by another strong runup in commodity prices. The fear is that farmers, rural businesses and others could hit borrowing limits or lenders could hit limits on their ability to manage the risks associated with these loans. The groups contend USDA has the authority through the Commodity Credit Corp. (CCC) to set up a temporary loan guarantee program to ensure "efficient marketing" if credit tightens. USDA would guarantee loans to institutions loaning to ag business and allow for the continuation of forward contracting and input supply financing to producers.