The entire Congressional delegation from Arkansas is pressing the U.S. Small Business Administration (SBA) to reverse a proposed rule that they believe would harm their state’s farmers’ ability to access funding that would be vital to their operations.
Sens. John Boozman and Tom Cotton recently joined Reps. Rick Crawford, French Hill, Steve Womack and Bruce Westerman in writing a letter to SBA Administrator Linda McMahon. In their letter, they urged the agency to revise the proposed rule, which if implemented would impose what they consider to be unworkable eligibility requirements on poultry farmers who rely on SBA’s 7(a) loan program. The 7(a) program provides loan guarantees to assist small businesses in obtaining credit.
“Poultry is the largest segment of Arkansas's agricultural industry, creating and supporting over 150,000 jobs including thousands of family farms. Access to capital is one of the most significant barriers to entry for farming, which is why Congress specifically included agriculture in the SBA's mandate,” the elected officials wrote.
“On March 6, 2018, the Office of the Inspector General (OIG) to SBA released a report titled ‘Evaluation of SBA 7 Loans Made to Poultry Farmers.’ Regrettably, the OIG concluded the loans did not meet SBA requirements for eligibility because integrators purportedly exercised control over the growers through contracts, operating procedures and other mandates, such that the family farmers should be viewed as ‘affiliated’ with poultry integrators. The subsequent proposed rule embraces these faulty conclusions, and it would jeopardize the livelihood of thousands of small family farms and small businesses across Arkansas.”
In the letter, the senators and representatives pointed out that in reality, poultry growers are independent, registered businesses who are solely responsible for obtaining financing, supervising, managing and directing day-to-day operations, and paying all taxes, while the integrators establish quality criteria, provide technical support and provide certain inputs.
Both senators and all four representatives are Republicans. Boozman and Crawford are members of their chambers’ agriculture committees.
