Master Bennet Pres IBA a

as we visited this morning that became very clear that our problems were somewhat parallel and so I'd like to introduce to you at this time WC Bennett who is president national president of the independent Bankers Association WC thank you very much it is a distinct pleasure or need to speak to this annual meeting of your national farmers organization I thank you so much for the invitation I come to you today as your natural friend your organization and the independent Bankers Association of America which I represents share many similar goals and concerns I believe that the foundation of our similarity of purpose is that both our memberships both the family farmer and the independent bank-owned are struggling to serve our communities as local businessmen in an era of business mergers and economic concentration you represent tens of thousands of independent farm families who must compete with corporations and absentee owners of land many of whom lacked the family farmers heritage and dedication to conserving the soul and serving the needs of the local community a vaa represents about 7400 community banks who operate in the world of Citicorp and merrill lynch the likes of who aspired to channel local money out of the agriculture communities and to divert these funds into the financing of conglomerate mergers and other projects that are far removed from agriculture and this nation's agricultural enterprises contrary to the absentee farmer and the absentee banker our financial firm both the family farmer and the independent banker truly belong to and are a part of the community in which they live and work permit me if you will to inject at this point and this is not in my prepared text but my experience as a banker for some 33 years I want to share with you at this time I shared this belief with a group of bankers saturda passed in the southern minnesota western iowa and eastern South Dakota area but in my 35 years of banking I have found that farmers now I mean the the true farmer one who depends upon farm production for his livelihood and the well-being of his family not the merchant who owns a farm for a tax write-off or for some other purpose I'm talking about the true farmer and their families are among the best customers of independent banks while all do not have a degree from an accredited college they have all been graduated from the school of hard knocks and have earned a master's degree in experience true farmers as a group are loyal honest religious courteous and appreciative but they will not be pushed pressured or shoved around they work on their own timetable but let me assure you as an independent banker that the true farmer pays his debts I remind bankers as I travel over this great nation - never underestimate our fail to appreciate that guy in the build all he might be the key to his personal successes their true farmer should not be neglected nor ignored even bankers could be hungry without him well back to my text I be a memo banks are also truly partners with you in the agricultural economy the greatest dialog value of operating loans of our agriculture is made by banks with assets of less than twenty five million dollars banks of that size make up 80 percent of our membership we are concentrated in eighteen major agricultural states many of which are major nfo membership states also as your partners in the agricultural economy we are painfully aware that farmers face an increasing list of their cash economic squeeze the United States Department of Agriculture is now projecting a third consecutive year of falling net cash farm income with 1982 farm income expected to be even lower than the 19 billion expected in 1981 if these projections actually materialize and if the farm real estate market remains sluggish we could see a rash of farm delinquencies and defaults in the months ahead I know that your operating expenses have spiraled upward in recent years statistics show that farm operating expenses during the four years 1977 through 1980 increased sixty-three percent from fifty seven point six billion in 1977 to 93 point eight billion last year interest rates have outpaced most of the cost it cost the corn farmer in average three dollars 15 cents per acre for interests on credit in 1978 and six dollars and 31 cents per acre in 1980 which is a hundred percent increase in interest cost in two short years the cost price squeezed faced by you as family farmers is certainly not alien to the understanding of community bankers we to find ourselves in a situation in which our cost of loanable funds move higher and higher while the price of our farm and other small business customers are able to pay credit is limited by the prices which they receive despite the higher cost of loanable funds however I can assure you that a top priority of the local banker in your community should continue to be to serve your capital needs we understand that the American economy rest on the keystone of agriculture and that the family farmer is the strength of this country's agriculture we also believe that public policy must assure the continued existence and vitality of the family farm agricultural prices must be kept in relative balance with other segments of the economy to support these goals the IBA a testified in March of this year before both the House and Senate Agriculture committees on the new four-year farm bill during the ensuing months we have worked closely with your own representatives in Washington in trying to get the strongest bill possible for you as farmers I baa staffed up this cooperative effort with you back in January of this year when we hired a Washington office staff person to work full-time in concert with the agricultural communities in our efforts on the farm bill we especially supported the maintenance of the commodity Credit Corporation price support loan program which increases in the price support levels which would more adequately corner the farmers cost of production we understand as you do that the CCC price support underscores the prices which farmers receive in the marketplace and are the most potentially effective means of supporting farm income through public policy the I baa also urged the Congress to maintain strong efforts to expand export markets for farm commodities and to give the American farmer free and unhindered access to world markets we need to develop new markets and new uses for farm products both here at home and throughout the world this country's public policies should do everything possible to expand the export our farm products at prices which returned the maximum dollar to you our producers after all besides feeding in clothing this nation our farmers are shipping enough food and fiber to the rest of the world to pay about half the total bill for the United States all imports the independent Bankers Association of America continued and will continue to work with you in partnership to secure the best possible federal farm price support and marketing policy but we have to face the fact that the results may be less than adequate no doubt you remain less than satisfied with the farm bill which is slowly taking shape this year the nfo long recognized and has recognized for some time the need to complement the government's efforts by serving as a bargaining and marketing agent for farmers and livestock producers you can be justifiably proud of your organization's unique achievements and adding muscle to the agricultural producer in the marketplace we applaud your efforts and your success in this area we in the IBA could not agree with you more that this nation is better served through the joint action in the marketplace by family farmers and other independent businesses where necessary to achieve equitable returns rather than through the mergers of small businesses into business giants with nationwide market power the farm bill was not the only measure on which the nfo and the IBA a worked together this year we also cooperated in seeing that agriculture was included in the old sailors bill which Congress enacted as a part of the tax cut package this past summer for a while it appeared that the Congress would tie the proceeds from the tax exempt all saver certificates to loans for housing but not for agriculture even though the one-year certificate is more directly applicable for short-term farm production loans than for long-term home mortgages with the active inhibition intervention of your organization and other farm and ranch groups we persuaded the Congress to include agriculture on par with housing this clearly could not have been done without our joint coalition efforts although it is too early to judge the full effect of the old Sabres legislation at a minimum it will mean that a substantially larger volume of funds will be available through community banks for agricultural lending last year the IBA a worked in concert with the nfo for the passage of the Farm Credit Act Amendments of 1980 provisions of that bill which should broaden access to the discount window of the federal intermediate credit banks for independent commercial banks who need additional funds for agricultural lending the discounting provision is still in the process of being implemented but once in place it should strengthen the ability of our banks to meet your credit needs including enabling banks to make somewhat larger loans to individual farmers and ranchers having worked together on a number of important issues during the past year I believe that an even broader scope of cooperative action is possible and desirable I'm convinced that more coalition efforts among people who are dedicated to the local community would be useful in addition to farmers and ranchers in country bankers such coalition's can include local real estate agents independent insurance agents small business organizations and others obviously the exact composition of the coalition that makes sense will depend upon the specific issue involved two issues come to mind on which I believe we could employ a joint effort first the issue of Interstate banking and the maintenance of the dual banking system if we are to maintain hundreds of strong community banks in each of our major agricultural states both federal and state chartered institutions we need the active assistance of the nfo and the family farm community to help control the appetite of the large bank holding companies for a nationwide domination of banking and the elimination of the family farm we know from experience that the nationwide banking systems that are controlled from Wall Street and other centers will siphon capital out of rural and agricultural areas into whatever uses the centralized bank management deems most profitable to them we also know that if the large bank holding companies were to take control over funds previously alone through our local community banks more of these funds could be used to foster corporate farming in the purchase of farmland by outside corporations funds that should be going into productive farming and ranching operations could be diverted into the acquisition of farms by cooperation thus contributing to the demise of the independent family farmer only through an effective coalition effort will we be able to keep the capital which is generated locally flowing through the community banks whose commitment is firmly with the communities in which they are located the second issue I would like to call to your attention for possible coalition action is the maintenance of specialized lending institutions in critical areas of credit need as you know Secretary Donald Regan has expressed his journal disbelief in specialized lending institutions such as the savings and loan for housing and the Farm Credit administration for agricultural needs and is called for changes in existing policies which on which specialized institutions are now based in a speech in Chicago on September 14 this year secretary Regan said and I quote in some ways specialized financial institutions are like the rookie pitcher who comes up from the minors and mows them all down with his fastball you can bet that the opposition will have adjusted by next season and our picture but I have more than just a fastball if he wants to stay in the big leagues unquote I believe what secretary Rican fails to realize is the fact that many of us are very happy playing in the minor leagues we're good at it and we have no ambition to play in the big leagues thus far the administration has built upon secretary Riggins baseball expertise to propose eliminating one area of the nation's specialized lending institutions the housing area the administration bill Senate bill number one 7:03 would completely remove the Savings and Loan Association and other thrift institutions from their statutory obligation to serve as specialized lenders for housing this bill is under consideration in the bank Senate Banking Committee at this time if it were enacted the thrift industry would not be legally required to make home mortgage loans other than for housing the primary is specialized lenders for our long term mortgages in this country are the federal land banks and land bank associations who of course are committed by law to the finance and farmland mortgages for farmers and ranches does Treasury secretary Regan have on his agenda a proposal to eliminate this specialized lending for farmland purchases as well this question may be more than academic given his general adversity to specialized lending institutions there's a good chance at this bill to move the thrills from their obligation for home mortgage lending can be defeated particularly since it is increasingly recognized that this would not solve the financial problems which many thrille are currently faced your organization I believe has a stake in the outcome on this issue in conclusion let me return to my general theme we of I baa are truly partners in the agricultural economy and there's no shortage of problems where our interests coincide equally important there is no lack of specific issues and proposals for actions around which we can harness our combined energies for the betterment of our communities the IBA welcomes the opportunity to meet our coloman challenges through a concerted effort it has been a joy for me to be here I appreciate your attendance I appreciate your attention thank you very much he spent his active service in the Navy and 16 years in the reserve he's been a college professor teaching American history and he is presently active in the congressional committee work and works very closely with our office there in Washington he serves on three subcommittees livestock and grains conservation and credit Research and Ford agriculture and congressman Fithian we want to welcome you here to the convention of the National Farmers Organization and we're anxious to hear what your projections are for the future of this industry and as you read the pulse of Congress welcome thank you very much Devon thank thank you it's good to be here what I what I should say that is that most of my life I spent farming for the enjoyment of it and teaching so that I could afford to farm we we do a lot of traveling in this business it's a it's been a very interesting very interesting existence I just wanted to share a couple travelling stories with you and I want to talk moment or two about the farm bill the principally I want to talk to you today about financing farming and interest rates and what I see down the way because I think that's probably where the rub comes in the main part in the main in the Washington a tional Airport the other day I I saw this scene that sort of took me back to the time when our kids were little I see some of the fellows in here at almost as old as I am so I know you remember that too you know how it was when you and your wife and the baby took off for the weekend there's always about umpteen suitcases and boxes and bottles and what have you and the the the usual complaint is that looks like we're going for a month well this was clearly the case this young couple were hustling through the airport he had one large suitcase in either hand he had a small one tucked under either arm he was kind of as he hurried they were obviously a little bit late he was just kind of doing a kind of a fast waddle she wasn't much better off she had in one arm she had a tiny babe had some of the ladies here know the arrangement the the diaper bag was hooked over the elbow and then the baby was cooked in the elbow in the other hand she was dragging along little three-year-old who occasionally touched a foot down in the airport as he went along and she had her thumb stuck out and her purse was hung on that now that was the scene just as they whipped past me I heard him say to her well did you bring the piano and she said now let's not get smart about it and he said I'm not the tickets were on it the the other other traveling story I'd like to share with you has to do with the with a train ride you have to understand how the people were seated the the new configuration on a train is to have not all the seats looking forward but to have one pair looking forward and then the one facing that and so on down the line well in this particular case this was the seating arrangement of the four people the the colonel of the Marine Corps was sitting next to the window looking forward as the train went down the track absolutely spit and polished from head to toe you could see yourself your image in his shoe toes alongside of him was a fairly well-dressed but no competition for the colonel a young man who was in the Air Force and was a corporal facing the colonel and looking backward and sitting by the window was a strikingly beautiful young lady 21 22 and next to her facing the Corporal was a an elderly spinster and that was the arrangement when the train went in the tunnel and the electricity didn't work right and it went dark for a moment and there was this very loud kissing noise followed immediately by an equally loud slap as the train pulled out the tunnel it wasn't clear entirely what had happened except that the kernel was the one that had been slapped because he had four red finger marks right down along the side of his face and he was sitting there still burning sitting at attention looking straight forward and it was the thought in the minds of each that I wanted to share with you the kernel thought that it was very clever the Corporal to criss cross over in front of him and kissed the girl and caused the girl to slap the kernel the young lady thought it was a little strange that whoever did the kissing chose to kiss the elderly spinster instead but she didn't really mind the older lady wondered to herself why it couldn't be her just once in a while why it had always to be some young pretty thing that's receiving this kind of attention the Corporal had the final thought for he thought that he might have been the only man in military history to have kissed the back of his hand slapped a colonel and gotten away with it now I I would like to report to you that the farm bill is done that it has been voted upon and the conference report is over and it's gone and it's a great bill none of those things are true so I'm not gonna report on it in that fashion the bill in fact is inadequate probably the best you can get under the circumstances in Washington right now but still quite inadequate I do want to say that the parts of the bill which are creating most of the headlines are the least important the smaller crops the sensational battle over peanuts important to peanut growers to be sure but hardly the centerpiece of the farm bill and the same would be true of the argument over tobacco price supports and the acreage allotment I should say since the money was taken out of the tobacco program and the rest in fact I said at the outset that the program was inadequate I don't want to - dammit I voted for it I'll probably vote for it again holding my nose while I'm doing so because the alternative of not having anything would probably be worse in fact there are couple of provisions that I'm kind of happy to see there one of them which the nfo has been very very active in seeking over the last several years and Chuck Fraser does a very outstanding job for you folks down there I digress only to say that it is rare in Washington lobbying and representing of organizations that you have someone who has that kind of respect and also that kind of knowledge in terms of what is possible what is doable and what the farmers across this country need and Chuck Fraser stands very very high in my book and in the books of every member of the Agriculture Committee of both sides one of the things which you and I have been very concerned about over the last several years is the periodic in putting in place of an embargo with all of the concomitant events that's that follow that that's equal the destruction of the market the sagging of prices and the increase of competition somewhere else in the world and usually the American farmer takes it on the chin I know of no embargo in which it didn't work out that way and the most recent one is just one more example we have put in the bill and I hope that this survives the conference an embargo protection provision with 90% of parody assured on any commodity that was affected by a future in export embargo loan rates raised to the average price of the market for the 15 days preceding the embargo in case of a national security embargo the second provision which is there but it's too bad that it's not funded is the commodity Credit Corporation rollover or revolving fund to finance some overseas exports and increases in sales