Press Release - Financial Relief for N. Colorado Farmers
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OFFICE OF GOVERNOR BILL RITTER, JR
FOR IMMEDIATE RELEASE
SATURDAY, MAY 9, 2009
CONTACT:
Evan Dreyer, 720.350.8370, evan.dreyer@state.co.us
GOV. RITTER APPLAUDS FINANCIAL RELIEF FOR N. COLORADO FARMERS
Gov. Bill Ritter today thanked U.S. Agriculture Secretary Tom Vilsack for securing more than $250 million in federal Farm Service Agency loan funds for farmers affected by the failure of New Frontier Bank in Northern Colorado.
The announcement of the new funds was made by Sens. Michael Bennet and Mark Udall and Rep. Betsy Markey. The three federal lawmakers, Secretary Vilsack and Gov. Ritter will appear together at a rural community forum in Brush on Monday, where they will discuss the New Frontier Bank situation and what is being done to help those who have been impacted by the bank failure.
Gov. Ritter said he hopes to work with Secretary Vilsack to help ensure that agriculture producers who had been banking with New Frontier now have enough time to secure new lenders.
"The sudden failure of New Frontier Bank has been devastating to hundreds of northern Colorado farmers and ranchers who already are already struggling with a tough economy, fluctuating commodities prices and an ongoing national credit crunch," Gov. Ritter said. "This loan funding will be a much needed boost for many of our smaller operations and family farms--at a critical time when they urgently need resources for the spring planting season."
The Farm Service Agency estimates it will be able provide about 1,900 family farmers with direct operating loan assistance and 620 family farmers with guaranteed operating loan funds.
In a May 1 letter, Colorado Agriculture Commissioner John Stulp asked Sens. Udall and Bennet and Rep. Markey to pursue additional FSA loan funding. Here is the complete text of the letter:
May 1, 2009
Honorable Mark Udall
Dirkson Senate Office Building
Washington, D.C.
Honorable Michael Bennet
Hart Senate Office Building
Washington, D.C.
Honorable Betsy Markey
1229 Longworth House Office Building
Washington, D.C.
Dear Senators Udall and Bennet and Representative Markey:
Thank you for your recent letter to Secretary Vilsack regarding the dire situation facing north-central Colorado due to the recent failure of the New Frontier Bank of Greeley, Colorado. This financial problem is unprecedented in Colorado. Due to its extensive agricultural loan portfolio, the New Frontier failure will have serious economic impacts to its borrowers as well as many non-customers who did business with them.
I and a few representatives of the dairy and cattle feeding industries in Colorado met with FDIC officials today. We learned that after three weeks of FDIC management, only $4 million of the bank's $750 million loan portfolio has been purchased. This dismal statistic bears witness to the lack of available capital that banks can lend to producers seeking new financing.
I urge you to do all in your power to direct additional resources to the Farm Services Agency's Direct and Guaranteed Loan Programs. In conversations with Acting State FSA Director Gary Wall, we have learned that all the available Direct Loan Program funds have been committed. While FSA's individual loan limits are rather restrictive, and we would like to see them raised substantially, the loan programs could provide valuable assistance to crop producers seeking operating loans. NFB has a wide range of loans and loan amounts, many far exceeding FSA's limits, and some producers' debt to assets ratios are terrible. Nonetheless, the FSA loans will do some producers a lot of good.
My staff and I have been in regular contact with the FDIC personnel who are managing the closure, and I can attest to their professionalism and their understanding of the unique issues facing the north central Colorado agricultural community. They have been very accommodating to distressed borrowers, and have even offered to provide office space for additional FSA personnel to help NFB borrowers access their programs. But FDIC has its limits, and the borrowers are approaching those limits rapidly. FDIC is not a bank and is not a substitute for refinancing.
I am certain they would take the time to brief your staffs as well as those of the agriculture and banking committees.
The magnitude of loan failures continues to grow, and negative cash flows are compounding the problem.
Thank you for your service to Colorado's agricultural community. If I can be of any assistance in this matter or any other topic, please do not hesitate to call.
Sincerely,
John R. Stulp
Commissioner