When most people think of California, images of sun-soaked beaches, bustling cities, and tech giants in Silicon Valley often come to mind.

However, California is much more than that. It’s a pillar of the nation’s agriculture industry and a vital force that supplies over a third of the country’s vegetables and nearly three-quarters of its fruits and nuts.

This produce largely comes from family-owned farms like mine right here in the Central Valley, a region that relies heavily on support from community banks to meet financial needs and keep operations running.

As a fourth-generation farmer now based in Bakersfield, I’ve witnessed firsthand the power of community banks as they provide the loans, financial services, and quality customer service that allow our local farms and businesses to succeed. However, the FDIC recently announced plans to roll back its rules that have allowed community banks to build stable liquidity from innovative, diverse deposit sources.

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Proposed Rule Changes Will Hurt Small Banks, Farms

These changes are not just unnecessary but hinder smaller banks from modernizing with the rest of the industry. If this source of funding is cut off, it would be detrimental to the future of local businesses — leaving smaller banks floundering and our local economies to deal with the fallout.

The agriculture industry is unpredictable, with factors like weather and market fluctuations making it difficult to maintain a stable cash flow. Growing up on our family farm here in Kern County, we knew this reality all too well.

To navigate these challenges, farmers and other small businesses often turn to their neighborhood banks for the financial support they need. In more rural areas, these banks are trusted members of the community who share our commitment to the health of our local economy. To continue this relationship, our local banks must have access to diverse and modern funding sources to secure the capital they need to offer competitive loans, flexible financing options, and other essential services to farmers and businesses.

If the FDIC’s proposed changes come to pass, it would make it harder for family-owned farms and businesses to operate, hire, and expand. In an industry where margins are already thin, this could spell disaster for many of our local farms, leading to job losses, reduced agricultural output, and a weakened local economy.

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Negative Impact Would Be Felt Coast to Coast

But the impact wouldn’t stop there. California’s agricultural output is not just a local issue — we help feed the entire nation. If our community banks can’t support local farms, the cumulative effects would be felt across the country. Tighter access to lines of credit would mean fewer resources for planting and harvesting crops, ultimately reducing the availability of fresh produce and other goods in grocery stores nationwide.

To protect the livelihood of my family, those in the Central Valley, and even more in farming communities across the country, the FDIC should reconsider these unnecessary changes. Our community banks need up-to-date resources to continue serving the farmers and businesses of today that make up the backbone of our local economies.

By restricting access to innovative banking channels, the FDIC would be undermining the very institutions that help keep our agricultural industry — and our nation’s food supply — strong.

About the Author

Jason Giannelli is a fourth-generation Kern County farmer. He resides in Bakersfield with his family.