Reform Farm Credit is a campaign that is made up of voters, taxpayers, small farmers, good government organizations and local agricultural lenders. It has two primary missions:
- To educate Americans about how the Farm Credit System, a government-sponsored enterprise, no longer serves the people it was created to serve and puts American taxpayers at risk by making large, non-agricultural loans;
- To advocate for better oversight and significant reforms of the Farm Credit System by the US Congress.
Unless there is proper oversight and reform of the Farm Credit System, taxpayers will be on the hook for a bailout, farmers’ access to credit will be greatly reduced, and American agriculture will suffer. We can’t let that happen.
US TAXPAYERS AT RISK THROUGH FEDERAL BAILOUT
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 $321 billion; if FCS needed another bailout, it would cost taxpayers $32.1 billion – an 802% increase from 1987.
- 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 US 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.
Check the Record – Farm Credit’s Systemic Risk
Farm Credit Insurance Corp. Lowers Premiums Despite Growing Debt
REGULATORY AND TAX ADVANTAGES CREATE UNEVEN PLAYING FIELD
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.
- 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 oil and gas business, but it makes hundreds of millions of dollars each year from mineral rights from foreclosed properties.
You pay your fair share of taxes. Why doesn’t Farm Credit?
GROWING LOANS TO BIG BUSINESS, SHRINKING LOANS TO SMALL FARMERS
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.
- A Farm Credit Bank issued 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 2016, only 15.5% went to the small farmers that the FCS was created to serve.
CoBank Lends to Publicly-Traded REIT
Cobank props up foreign subsidiary of failing publicly-traded lumber company
2016 FCS LOANS TO FARMERS
- 2016 FCS LOANS TO SMALL FARMERS
- 2016 FCS LOANS NOT TO SMALL FARMERS
- 2016 FCS LOANS TO SMALL FARMERS
- 2016 FCS LOANS NOT TO SMALL FARMERS
Voices For Reform
US Senator Chuck Grassley (R-IA)
“They came to my office to talk to me and I brought up some of the loans that were very questionable loans, I got the feeling that they were very embarrassed by the issues that I brought up with them.”
Mick Mulvaney, Director of the Office of Management and Budget
“…certain FCS lending institutions have utilized lending authority outside of their mission and intended purpose, put taxpayers at risk, compete with private sector financial institutions in areas outside of agriculture and farm-related businesses, and distort the market.”
Ralph Nader, political activist and consumer advocate.
“Providing loans to large corporations, to non-farm enterprises and to wealthy individuals and families for a variety of non-farm investments goes well beyond what the Farm Credit System was set up to do.”
US Representative Rod Blum (R-IA)
“They’ve made some very big loans to some very large and profitable customers that whether they’re ag-related is very, very questionable.”
US Representative Steve King (R-IA)
“Could we imagine then that we would be having this conversation now about Verizon and other telecommunications companies, and hundreds of millions of dollars that have gone into those particular endeavors, or could there be, if some members of this panel have a sense of mission creep, is that totally explainable?” […] “It behooves us all to stay within those boundaries. I think the mission statement’s fine, but I think you’ve overstretched it.”