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Facts

Among its historic accomplishments, the Farm Credit System qualified for the first-ever federal taxpayer bailout in 1987, a $4 billion golden parachute.

The System has ballooned into a $315 billion government-sponsored banking behemoth, lending hundreds of millions of dollars to large businesses while denying loan applications from small farmers.

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 $315 billion; if FCS needed another bailout, it would cost taxpayers $31.5 billion – a 788% increase from 1987.

chart-for-bailout_revised

 

  •  Following an investigatory hearing by the House Committee on Agriculture, the Farm Credit System’s regulator, the Farm Credit Administration, revealed that the Farm Credit System was “vulnerable to a market crisis.”
  • On September 24, 2013, the U.S. Treasury approved an additional $10 billion line of credit for the Farm Credit System – with no questions asked. In October 2014, the System asked for even wider loan-making authority.

Waste

If the Farm Credit System were a bank, it would be the 9th largest – and nobody seems to notice. Its tax advantages and unparalleled access to lines of credit place US taxpayers at great financial risk.

  • The FCS made $4.85 billion in profits in 2016 but paid only $175 million in federal, state and local taxes. That’s an effective tax rate of only 3.61 percent.

  • The Farm Credit System is not supposed to be in the mining business, yet they make hundreds of millions of dollars each year from mineral rights from foreclosed properties.

Neglect

Farm Credit System loans, far from their mission to support small local farmers, are being used to finance luxury properties, vacation homes, wineries and to invest in natural resources.
  • A Farm Credit Bank isspie-chartued a $725 million loan to telecom giant Verizon to finance its purchase of a European cellular company.
  • Of the total dollar value of loans doled out by the Farm Credit System in 2015, only 14% went to the small farmers that the FCS was created to serve.