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New CoBank Loan Highlights Need for Farm Credit Oversight

If there’s one thing you can trust the Farm Credit System (FCS) to do, it’s to stretch the rules – especially the “similar entity” rule – and twist the spirit of Farm Credit’s mission. Its explicit mission in the Farm Credit Act: “improving the income and well-being of American farmers and ranchers by furnishing sound, adequate, and constructive credit and closely related services to them, their cooperatives, and to selected farm-related businesses necessary for efficient farm operations.” But year after year, this last clause has been twisted and tortured to support Farm Credit’s unrestrained, out-of-bounds growth.

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Farm Credit Lender Promotes Loans for “Non-Agricultural Purchases”

This week, Farm Credit of the Virginias, serving Virginia and West Virginia, engaged in Farm Credit’s time-honored tradition of grossly expanding its mission. Farm Credit of the Virginias proudly shared this graphic with the public, letting everyone know that for full time farmers, “non-agricultural purchases can be considered.” In case there were any lingering doubts about whether Farm Credit was going to adhere to its mission, Farm Credit of the Virginias has made it clear that it doesn’t care about that.

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New FCA Regulation Could Leave Farmers with Balloon Payments and Cash Flow Problems

The Farm Credit System (FCS), the United States’ first government-sponsored enterprise (GSE), exists to provide credit to America’s farmers, especially its young, beginning and small farmers. Its regulator, the Farm Credit Administration (FCA), exists ostensibly to keep the FCS true to its mission. It does this by taking account of agricultural credit markets, updating its regulations so they’re current and applicable, and enforcing them.

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Farm Credit Continues to Fall Short on YBS Lending

Since 2016, new loans to young farmers fell nearly 24 percent, new loans to beginning farmers fell nearly 18 percent, and new loans to small farmers fell more than 20 percent. That’s a staggering drop.

Farm Credit Loans Finance Solar Project Slated to Power Facebook

Farm Credit is again stretching its lending authority and this time the financing deal is especially egregious: Farm Credit lender CoBank is serving as the “sole lead arranger” for a loan to a multinational energy company building solar panels slated to power Facebook servers. Yes, you read that correctly: a Farm Credit lender, tasked with supporting farmers and ranchers, is instead financing a construction project that will ultimately benefit one of the largest tech companies in the world.

According to Renewables Now, CoBank is providing the “financing, comprising a construction loan, letter of credit facility and back-leverage term loan” for solar energy centers in Oregon. As Renewables Now explains, once operational, another company named PacifiCorp, “will buy the output of the solar plants under a long-term contract to supply Facebook’s data centre in Prineville, Oregon.”

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Broken CoBank-Backed Promises Likely to Leave NORPAC Farmers With Fraction of Payments Owed

When NORPAC Foods filed for bankruptcy in August 2019, NORPAC’s CEO assured its farmer-members that financing from Farm Credit lender CoBank meant that they would receive payment for produce delivered that fall. Now, a year and several legal filings later, it’s clear that those farmers whose crops were sold as NORPAC assets will likely only receive a fraction of what they are owed.

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CoBank Loans Meant for Co-ops Support Another Private Telecom Company

The Farm Credit System’s (FCS) record of loans to huge telecommunications companies leaves most observers confused, and for good reason. Why is a government-sponsored enterprise (GSE), which was established to furnish sound credit to farmers, extending enormous loans to Verizon ($725 million), US Cellular and AT&T ($425 million) and Frontier Communications ($350 million)?

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New Credit Rating Reveals Farm Credit “Stability” Comes at Expense of Taxpayers

The Farm Credit System (FCS) has the distinction of being the original government-sponsored enterprise (GSE) – defined as a quasi-governmental entity established to enhance the flow of credit to specific sectors of the American economy. Like other GSEs including Fannie Mae and Freddie Mac, the FCS has benefited immensely from the federal government’s largesse. It raises the question of whether the FCS can stand on its own two feet.

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While Farmers Struggle, Farm Credit Focuses on Expanding Mission

The COVID-19 pandemic has upended American agriculture, and farmers across the country are feeling the pressure. In these difficult times, Farm Credit should be focused on helping farmers and supporting U.S. agriculture. Instead, Farm Credit seems to care more about expanding the scope of its mission than meeting the needs of the producers it is already mandated to serve.

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