Banks Lend Nearly $100B to Support US Agriculture

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Complete agricultural lending by US farm banks remained strong at $98.6 billion in 2020 – a fall of simply 1.8% from the yr earlier than, Based mostly on the American Financial institutioners Affiliation (ABA).

The ABA’s annual Farm Financial institution Efficiency Report said The general fall was primarily a Outcomes of a 6.7% decline in agricultural manufacturing loans, wright hereas authorities loans additionally negated The want for farms To hunt private monetary assist.

Loans for farmland which elevated 2.1% over the yr to $56.7 billion.

The ABA report, which covers the performance of the nation’s 1,642 agricultural banks, found these institutions have been essential in underpinning the survival of rural communities, As properly as to small- and medium-sized farms, By way of the Covid-19 pandemic.

Importantly, farm banks assisted rural communities via the Paycheck Safety Program (PPP). On The prime of 2020, farm banks had 172,818 PPP loans worth $12.7 billion on their stability sheets. The ABA said this was essential to “preserving jobs at native small companies and offering An important lifeline to the communities they serve”.

Financial institutions additionally currentd Greater than $45.2 billion in small farm loans ($500,000 or much less), collectively with $10.5 billion in micro farm loans ($100,000 or much less) final yr.

The report found that farm banks have constructed “strong, extreme-extreme quality capital reserves all through 2020 and are properly-insulated from risks Associated to the agricultural sector”.

Equity capital at farm banks elevated 9% to $52.6 billion, wright hereas Tier 1 capital elevated by $3.6 billion to $48.3 billion.

The ABA’s chief economist, Sayee Srinivasan, said: “While the agricultural sector will proceed to face challenges As a Outcome of the financial system reopens and recovers from the coronavirus pandemic, the strong asset extreme quality and capital ranges of America’s farm banks will assist Make constructive that they proceed To current assist to rural communities.”

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Complete agricultural lending by US farm banks remained strong at $98.6 billion in 2020 – a fall of simply 1.8% from the yr earlier than, Based mostly on the American Financial institutioners Affiliation (ABA).

The ABA’s annual Farm Financial institution Efficiency Report said The general fall was primarily a Outcomes of a 6.7% decline in agricultural manufacturing loans, wright hereas authorities loans additionally negated The want for farms To hunt private monetary assist.

Loans for farmland which elevated 2.1% over the yr to $56.7 billion.

The ABA report, which covers the performance of the nation’s 1,642 agricultural banks, found these institutions have been essential in underpinning the survival of rural communities, As properly as to small- and medium-sized farms, By way of the Covid-19 pandemic.

Importantly, farm banks assisted rural communities via the Paycheck Safety Program (PPP). On The prime of 2020, farm banks had 172,818 PPP loans worth $12.7 billion on their stability sheets. The ABA said this was essential to “preserving jobs at native small companies and offering An important lifeline to the communities they serve”.

Financial institutions additionally currentd Greater than $45.2 billion in small farm loans ($500,000 or much less), collectively with $10.5 billion in micro farm loans ($100,000 or much less) final yr.

The report found that farm banks have constructed “strong, extreme-extreme quality capital reserves all through 2020 and are properly-insulated from risks Associated to the agricultural sector”.

Equity capital at farm banks elevated 9% to $52.6 billion, wright hereas Tier 1 capital elevated by $3.6 billion to $48.3 billion.

The ABA’s chief economist, Sayee Srinivasan, said: “While the agricultural sector will proceed to face challenges As a Outcome of the financial system reopens and recovers from the coronavirus pandemic, the strong asset extreme quality and capital ranges of America’s farm banks will assist Make constructive that they proceed To current assist to rural communities.”


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