New farmers and ranchers should be provided appropriate financial tools to help them succeed in business, the chairman of the National Cattlemen's Beef Association's (NCBA) Tax & Credit Committee told a Senate Committee today.

Frank Brost, a cattle producer from Rapid City, S.D., testified before the Senate Agriculture, Nutrition, and Forestry Committee for the Agriculture Credit to be included in the FY 2002 Farm Bill.

"Studies show that a lack of startup capital is the primary concern for both lenders and young farmers and ranchers," said Brost. "Lack of equity and the current return on investment keeps many successful partnerships from developing."

NCBA supports efforts to better serve these new entrants to the cattle industry. Relieving the producer and lender from undue regulations are additionally important. "Tools that help young producers begin operating without undue risk to the capital provider must be continued," Brost said.

Regardless of the size, location, or type of cattle operation, a number of changes have taken place in recent years that alter the relationship between producers and their credit/capital provider.

"Today's rancher may be depending on as many as a dozen different sources of products, management, and services," said Brost. "These most likely involve a financial relationship."

NCBA primarily believes three areas are essential in the next Farm Bill: investments in the future, reasonable regulations and effective infrastructure, and creative solutions to long-term concerns.

"The repeal of the Death Tax, inclusion of Farm Fish and Ranch Risk
Management (FFARRM) accounts, and reductions in Capital Gains rates will help every producer to better manage their resources in a manner that is conducive to business," Brost said.

NCBA further asked that new Farm Bill legislation be market-based, to supply demand driven when addressing the needs of agriculture.
This is the Committee's first hearing of the year on agriculture credit and its part in the FY 2002 Farm Bill.

NCBA