• Credit where credit’s due

    Farm Credit Watch | Waste • 06.27.17

    If it were a bank, the Farm Credit System (FCS) would be the seventh largest in the country. At $320 billion in total assets, the FCS has grown beyond its mission. How did it get there?

    There are many reasons, but one’s certain: it has neglected the credit needs of young, beginning and small farmers.

    Young, beginning and small farmers are the farmers who need credit the most. And according to the Farm Credit Administration’s (FCA) latest update, the FCS is still underserving young, beginning and small farmers.

    This hasn’t gone unnoticed. Hoosier Ag Today and The Fence Post, both plugged into the world of agriculture, have reported on the lukewarm numbers the FCA has reported. And lukewarm is an understatement: the FCS’s loans to young, beginning and small farmers have remained at stagnant levels. Young farmers are receiving 11.7 percent of new loan volume, and beginning and small farmers are receiving 16 and 15.4 percent respectively. This is pathetic.

    The FCS is required by statute to provide credit for young, beginning and small farmers. And the FCS is following the law – technically. The FCS is providing minimal credit to young, beginning and small farmers, but it isn’t following the spirit of the law. The spirit of the law is to engender and foster a new class of farmers, ranchers and producers who will be ready to sustain and expand American agriculture so that we can continue to be world’s leaders in agriculture. The FCS is sorely failing that mission.

    Now, credit where credit is due: the FCS has increased their loans to young, beginning and small farmers as a percentage of total new loan volume. But what they have done is simply not enough: more credit, quite literally, is due to young, beginning and small farmers. They are the foundation of agriculture in this country. And the FCS should be mostly providing to these underserved communities, rather than to Verizon, Rayoner Inc. and CyrusOne Inc.. The spirit of the law which created the FCS was to strengthen independent agriculture in America – to foster Americans who wanted to provide food for their families, their neighbors and their countrymen.

    The FCS has grossly strayed from that mission. It’s up to Congress to make sure that the FCA and the FCS are adhering to their mission: to protect American agriculture by supporting its future – young, beginning and small farmers.