A farmer harvests soybeans. USDA Natural Resources Conservation Service photo by Brandon O’Connor.
The North Carolina House Agriculture and Environment Committee voted Wednesday to approve legislation targeting socially responsible lending in agriculture, moving the measure to the House Commerce and Economic Development Committee.
Sponsors explain House Bill 62, the “Farmers Protection Act,” as a measure to prevent banks and credit unions from using discriminatory practices against farmers in the state.
It’s sponsored by Reps. Neal Jackson (R-Moore, Randolph), Jimmy Dixon (R-Duplin, Wayne), Jennifer Balkcom (R-Henderson), and Karl Gillespie (R-Cherokee, Clay, Graham, Macon).
Rather than race or gender, the bill targets “ESG” — short for “environmental, social, governance,” a method for evaluating sustainability performance.
The proposal purports to ban banks and credit unions from denying service to agriculture producers based on their greenhouse gas emissions, use of fossil-fuel derived fertilizer, or use of fossil-fuel powered machinery, according to the bill text.
“It says you cannot deny cancel financial services based upon a farmer’s ESG score or rating,” Jackson said. “Figure it based upon if they have good credit or not, but not based upon their ESG score.”
The House Judiciary 1 Committee approved the legislation at the end of February.
Rep. Pricey Harrison (D-Guilford) reminded members of the earlier discussion, where Jackson offered the bill is a preventative measure.
“You indicated in that discussion that there wasn’t any evidence of this happening right now among North Carolina banks and with North Carolina farmers, but it was part of a national effort anticipating what might happen,” she said.
Mark Swallow spoke during the bill’s public comment section as a representative of Democracy Out Loud.
He said there’s a reason ESG exists — as a protective measure, not a punitive one.
“It’s meant to make sure, as the climate is changing, that we can survive in it, including farming,” he said. “To try and de-incentivize bankers, you should be incentivizing farmers to do what they need to do to live up to those standards, because if they want to continue farming, they need to make those changes.”
On Wednesday, the committee also voted to advance HB 164, “Protect North Carolina Sawmills,” to the House Rules Committee.