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)?
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.
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.
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.
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.
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.
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.
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.
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
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: