Farm Credit Mid-America, an association of the Farm Credit System (FCS), is there to offer “unique solutions” for their customers’ needs. And Farm Credit Mid-America was there for its client, to the tune of a $27 million loan
Sound strange? It should.
Congress needs to act. The FCS has shown, repeatedly, that it cares more about profits than it does farmers, especially young, beginning and small farmers. Congress, take action: keep the FCS in line by cracking down and making sure that a certain percentage of loans are for small, young and beginning farmers. Future Americans will thank you.
The FCS has neglected the credit needs of young, beginning and small farmers for at least a decade. Instead of making loans to the people who need credit the most, FCS lenders have dominated the agricultural real estate lending market, holding over half of all real estate loans.
The Farm Credit System (FCS) and the Farm Credit Administration (FCA), only a month after being exposed at the House Appropriations Agriculture Subcommittee oversight hearing, were called before the House Committee on Agriculture for a “review”. Review is a bit of an understatement; if the FCS and the FCA have any more reviews like this then they’ll suffocate under the weight of the criticism.
Rep. DeLauro has said what many have thought: Congress desperately needs to reform Farm Credit. So far, multiple committees in both the House and the Senate have decided that Congress needs to take a closer look at the FCS and the FCA. And it should, because the FCS is on the precipice: it is growing larger every day, small farmers are being neglected and the FCS continues to make loans outside of its mission. Congress needs to act now.
If the FCA won’t step in, then Congress needs to. Congress – whether it’s the House or Senate Committees on Agriculture of the House Committee on Oversight and Government Reform or the Senate Committee on Homeland Security and Governmental Affairs – needs to act before it’s too late.
For now, it looks like Farm Credit East has temporarily evaded justice, and the FCS and the FCA have escaped blame for their negligence. But they’ll soon reap what they’ve sewn.
It’s no secret that farmers, especially young, beginning and small farmers, are struggling in this economy. To survive through the tough times, and to thrive during the good times, farmers need reliable access to credit. And the Farm Credit System’s (FCS) greatest defenders always say that the FCS and the Farm Credit Administration (FCA) are here to “ensure a safe, sound, and dependable source of credit and related services for agriculture and rural America.”
CoBank just doesn’t seem to get it. Month after month, quarter after quarter and year after year, CoBank extends questionable loans to what it considers “agricultural” entities. Loans to telecommunication companies, CoBank’s customers of choice, are usually defended as necessary for providing broadband access to farmers. And despite the fact that CoBank is only authorized to loan to cooperatives, it loans to large multinational corporations all the same.
The FCS has a duty, outlined in statute, to provide reliable access to credit for small farmers. So far, it hasn’t done its best to provide that access. And when government agencies don’t follow their mission, it’s time for Congress to take them to task.