Reform Farm Credit

Reform Farm Credit

Farm Credit Struggles to Provide Much-Needed PPP Loans to Farmers

The past three months posed unprecedented challenges for farmers across America as the country responded to the COVID-19 coronavirus. The most significant relief came from the federal government: on March 27, President Trump signed the CARES Act into law, establishing, among many other provisions, the Paycheck Protection Program (PPP). Administered by the Small Business Administration (SBA), Congress designed the PPP to help small businesses, including farms, ranches and other agricultural producers, keep employees on payrolls.

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Reform Farm Credit

CoBank Ensnared in Another Co-op Snafu

NORPAC Foods Inc. is a cooperative and the “‘largest processor’ of frozen vegetables and fruits in the Pacific Northwest.” In August 2019, it filed for bankruptcy, with CoBank providing a $124 million credit facility.

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Reform Farm Credit

Lack of Oversight Leaves Sprawling Farm Credit System Unaccountable

Good government groups in civil society often take on the task of making sure government fulfills its mission, and does so efficiently. Each has its niche, and examines different parts of the government. One important group, founded by the late U.S. Senator Richard Lugar (R-IN), focuses on many of the Senator’s signature achievements in his career – nonproliferation of weapons of mass destruction, global food security, foreign assistance effectiveness and global development, energy security, and enhancing bipartisan governance. The Senator’s eponymous Lugar Center brings together expert sources and sponsors research to improve the quality of debate and bridge ideological divides around these important issues.

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Reform Farm Credit

Battery Company Financing Deal Raises Questions About CoBank Lending

The Farm Credit System (FCS) has a duty to support America’s farmers, ranchers and producers, with a specific mandate to help young, beginning and small farmers. Though it has failed to follow through on this mission, it hasn’t been inactive.

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Reform Farm Credit

Farmers are Struggling. Congress can Help by Confirming Rod Brown

As the ongoing coronavirus public health crisis continues to upend U.S. agriculture, farmers and ranchers are struggling with supply chain disruptions, labor shortages, uncertainties in the livestock market, and the mounting economic toll of millions of Americans sheltering at home.

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Reform Farm Credit

What Happened to Farm Credit Services of Hawaii?

Six months ago, on July 1, 2019, Farm Credit Services of Hawaii disappeared.

What could have happened? In the immediate term, FCA corrections to the FCS of Hawaii profile tell us that it was absorbed by American AgCredit, based out of Santa Rosa, California. American AgCredit’s area of service includes Oklahoma, Kansas, Colorado, Nevada, California, and now Hawaii. But the American farmer and the public have the right to know the whole story. Continue Reading

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The ECORA Act would be a Huge Win for Farmers

The House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit’s December hearing to review agricultural credit conditions didn’t put observers at ease about Farm Credit’s ability to serve farmers and producers. But it wasn’t all negative – lawmakers have begun to call for meaningful reform of agricultural credit.

In 2019, Rep. Steve Watkins (R-KS) introduced HR 1872, the Enhancing Credit Opportunities in Rural America (ECORA) Act. And during the hearing, Rep. Roger Marshall (R-KS) called for one of the witnesses, Shan Hanes, to describe its benefits:

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Farm Credit’s Congressional Testimony Should Raise Serious Concerns

On the heels of November’s hearing to review agricultural credit conditions, in December 2019 the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit held another hearing to receive information from lenders directly, including from the Farm Credit System (FCS), about this important issue.

Farm Credit’s responses did not inspire confidence.

Two lines of inquiry, in particular, should leave observers concerned about Farm Credit’s record of serving underserved groups and its stability in a tough agricultural economy. Rep. Ann Kirkpatrick (D-AZ) , hailing from a region with significant Native American presence, asked: “Have any of you worked with Native American farmers or Native-owned lenders?”

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Farm Credit Institutions Protect Profits at Expense of Farmers

There are few things more important in agriculture than making sure that farmers have enough credit to operate their farms. Kansas recognizes this: it gives farmers easy access to credit by providing lenders with some helpful but limited tax incentives for lending to farmers. And the federal government recognizes this to an extent by granting the Farm Credit System (FCS) – and only the Farm Credit System – an exemption from federal income taxes on profits earned on real estate lending.

Some Farm Credit institutions are jealously guarding this tax advantage at the expense of farmers. Continue Reading

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What the FCA Chairman told Congress about Farm Credit

Last month the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit held a hearing to review agricultural credit conditions and the Farm Credit System’s (FCS) role in creating those conditions. Testifying before the subcommittee was Glen Smith, the Chairman of the Farm Credit Administration (FCA), the FCS’s regulator.

The question: should we be worried about agricultural credit conditions?

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Reform Farm Credit

Farm Credit Struggles to Provide Much-Needed PPP Loans to Farmers

CoBank Ensnared in Another Co-op Snafu

Lack of Oversight Leaves Sprawling Farm Credit System Unaccountable

Battery Company Financing Deal Raises Questions About CoBank Lending

Farmers are Struggling. Congress can Help by Confirming Rod Brown

What Happened to Farm Credit Services of Hawaii?

The ECORA Act would be a Huge Win for Farmers

Farm Credit’s Congressional Testimony Should Raise Serious Concerns

Farm Credit Institutions Protect Profits at Expense of Farmers

What the FCA Chairman told Congress about Farm Credit

FARM CREDIT FAST FACTS

1. RISK

In 1987, the Farm Credit System was bailed out by US taxpayers to the tune of $4 billion. At the time, the FCS was worth $40 billion. Today, the Farm Credit System is worth $335 billion; if FCS needed another bailout, it would cost taxpayers $33.5 billion – an 837% increase from 1987.

2. WASTE

If the Farm Credit System were a bank, it would be the 7th largest in the country – and nobody seems to notice. Its tax advantages, unparalleled access to taxpayer-backed credit, and lack of regulation often leave it as the only source of credit in rural areas.

3. NEGLECT

Farm Credit System loans, far from their mission to support small local farmers, are being used to finance huge multinationals like Verizon, AT&T, Rayonier Inc., Cyrus One Inc. and more.

Reform Farm Credit

FARM CREDIT FAST FACTS

In 1987, the Farm Credit System was bailed out by US taxpayers to the tune of $4 billion. At the time, the FCS was worth $40 billion. Today, the Farm Credit System is worth $335 billion; if FCS needed another bailout, it would cost taxpayers $33.5 billion – an 837% increase from 1987.

If the Farm Credit System were a bank, it would be the 7th largest in the country – and nobody seems to notice. Its tax advantages, unparalleled access to taxpayer-backed credit, and lack of regulation often leave it as the only source of credit in rural areas.

Farm Credit System loans, far from their mission to support small local farmers, are being used to finance huge multinationals like Verizon, AT&T, Rayonier Inc., Cyrus One Inc. and more.

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