Trump’s trade wars are pushing America’s rural economy toward a full-blown meltdown after years of financial hardship, and it's causing more farmers to default on loans while putting the squeeze on agricultural lenders
President Donald Trump’s trade wars are pushing America’s rural economy toward a full-blown meltdown after years of financial hardship, causing more farmers to default on loans while putting the squeeze on agricultural lenders.
“How many black swans have we had in the past couple years?” he said. “We’ve had weather, we’ve had African swine fever, we’ve had trade wars. I’d say this is pretty unprecedented. We haven’t seen anything like this since the ’80s.”By signing up you agree to receive email newsletters or alerts from POLITICO. You can unsubscribe at any time.
“Thousands of banks are in what you’d call rural areas,” said Mark Scanlan, senior vice president of agriculture and rural policy at the Independent Community Bankers of America. “When the ag economy starts taking a downturn, it affects them because it’s not only farm loans, it’s also those businesses that sell to farmers” that get hurt.
Gus Barker, CEO of Iowa-based First Community Bank, said his own institution is addressing the risks from the increasingly precarious financial conditions for his ag clients. He said the FDIC’s list of “problem banks,” which are at risk of failure, “is very, very low right now.” But he also stressed that many ag banks have taken a more conservative approach to lending, keeping in mind the lessons of the 1980s, and so far have continued to perform well. Still, “there are certainly some risks to be mindful of,” he said.
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