Washington, D.C. — Senators Tom Cotton (R-Arkansas) and John Boozman (R-Arkansas) today led nine of their colleagues in sending a letter to Small Business Administration (SBA) Administrator Jovita Carranza expressing concern over a new rule that will make it more difficult for poultry growers to access SBA loans. Specifically, the Senators are concerned that while the SBA is accepting comments on the rule until April 10, 2020, the provisions targeting poultry farmers are slated to go into effect on March 11, 2020, before the SBA has time to fully evaluate the comments submitted. The Senators ask the SBA to extend the comment period for the interim rule in order to better understand its potential impact on the poultry community.
The letter is also signed by Senators Cindy Hyde-Smith (R-Mississippi), Doug Jones (D-Alabama), Roger Wicker (R-Mississippi), Kelly Loeffler (R-Georgia), Thom Tillis (R-North Carolina), Richard Burr (R-North Carolina), David Perdue (R-Georgia), Joni Ernst (R-Iowa), and Jim Inhofe (R-Oklahoma).
Background:
On February 10, 2020, the SBA released an Interim Final Rule (IFR) establishing a review process whereby SBA would review farmer contracts and make an “affiliation” determination – whether that farmer was “affiliated” with a chicken processing company, thus ineligible for SBA assistance through loan guarantees – based on a set of criteria newly announced in the Interim Final Rule. This would substantially affect the operations of many small, family farms across the country. Importantly, the comment period for the IFR closes on April 10, 2020, but the effective date of the poultry-related provisions goes live on March 11, 2020. This letter requests that SBA extend the effective date to October 1, when the remainder of the rule’s provisions goes final.
March 6, 2020
The Honorable Jovita Carranza
Administrator
United States Small Business Administration
409 3rd Street SW
Washington, DC 20416
Dear Administrator Carranza:
We write to respectfully express our concerns with the United States Small Business
Administration's (SBA) Interim Final Rule entitled Express Loan Programs; Affiliation Standards (Docket No. SBA-2020-02128 / RIN 3245-AG74), published in the Federal Register on February 10, 2020. Due to our concerns with the underlying policy changes, specifically those made to 13 C.F.R. §121.301(f), included in the rule and their potentially significant impact on poultry farmers in our states, we urge SBA to extend to October 1, 2020 the effective date of the above-referenced Interim Final Rule. We do not agree with the decision to make the effective date March 11, 2020, prior to the end of the comment period on April 10, 2020, and we believe that an extension is a more appropriate course of action that will allow SBA a meaningful opportunity to review and consider all comments.
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. Unfortunately, the Interim Final Rule, as currently written, could adversely affect many independent, small, family farmers that raise broiler chickens and turkeys across the country. Our constituent farmers deserve to have their voices heard prior to the implementation of a rule that will result in a significant impact on their livelihood. With the current state of the farm economy in mind, we urge SBA to take the necessary time to consider the potential significant impacts this rule would have on the sustainability of our family farm operations.
We appreciate your attention to this matter and look forward to your response.
