Reform Farm Credit (RFC) has been working for two years to bring the accountability that the Farm Credit System (FCS) sorely needs. And the past year has seen some good movement in making sure the FCS is following its mission to provide reliable access to credit for all farmers – especially those who need it most.
In December, RFC exposed troubling news about the FCS – its largest bank, CoBank, made a $1.55 billion loan to a real estate investment trust (REIT) investing in global data centers, hardly an agricultural loan. RFC also found that the FCS could be ill-placed to make loans to support midsize farmers in addition to small farmers, despite passing a major milestone: as of this past September, the FCS holds $315 billion in assets.
And throughout election season, lawmakers across the country called the FCS out on its lack of accountability and its efforts to expand beyond its mission. Lawmakers have noted the FCS’s glaring issues and have taken steps to make sure farmers, and the economy at-large, are not adversely affected. In May the Senate Committee on Agriculture, Nutrition and Forestry took the FCS and the Farm Credit Administration (FCA), the FCS’s regulator, to task for their gross mismanagement. The fallout from the hearing was so severe that the Farm Credit Council, in Washington DC to celebrate the FCS’s 100 year anniversary, had to cancel an event to account for a “recently announced strategic shift in direction for reputation management.”
But lawmakers wouldn’t have been able to do excellent work in holding the FCS accountable without journalists and commentators uncovering the FCS’s abuses. In May Ralph Nader published a piece in The Huffington Post on “The Funny Business of Farm Credit” and The Washington Post’s Thomas Heath published an investigatory piece in April examining the FCS’s role in loans to Verizon, U.S. Cellular and Cracker Barrel.
In February, RFC discovered that a judge in Connecticut recently called for a federal investigation of Farm Credit East. The association, serving New England, was found to have “set up a new LLC in order to get additional funds from the federal government” for its client, a former state legislator.
Fortunately, 2016 began with the aftermath of the House Committee on Agriculture’s oversight hearing of the FCS and FCA in December 2015. Despite having two and a half hours to explain only some of the FCS’s egregious offenses, the panelists needed to submit extra testimony, the inaccuracies of which were exposed in RFC’s Check the Record series.
The Reform Farm Credit team has worked hard this year to return the FCS to its original purpose, but we can’t do it without your help. Keep visiting Reform Farm Credit to learn more about how you can help us continue the fight to hold the FCS accountable to its mission, to farmers and to taxpayers!