N.M. group pushes for a state public bank, citing N.D. example and touting benefits for small communities, farmers

Angela Merkert

Public banks – which are virtually non-existent in the U.S. – could be a major benefit to agriculture and other small, rural businesses, said Angela Merkert, the executive director of the Alliance For Local Economic Prosperity, in an interview with the Daily Yonder. The New Mexico-based alliance is working to push the state legislature to establish a public bank – a financial institution managed by the government in the public's interest.

North Dakota is the only state with a public bank, and that state had the lowest unemployment rate throughout the 2008 recession, a feat which Merkert said is creditable to an oil boom and programs of the bank. In New Mexico, one of the groups most interested in how a public bank could help small business is the New Mexico Food and Agriculture Policy Council. Lending programs from a public bank could help generate food processing businesses to keep the state's food production profits inside state lines.

"About 95 percent of our agricultural products go outside the state for processing and then we bring back 94 to 95 percent of those processed foods into the state," Merkert said. "A number of people involved in agriculture would like to see those percentages decreased."

Farmers relying on short-term loans that can be paid off "in the fall or early winter when the crops are in" could also benefit from a public bank, Merkert said. Fewer community banks support those types of short loans, but a public bank could step into that void. Opponents of the bank proposal, Merkert said, are often those who call for smaller government.