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Lack of Oversight Leaves Sprawling Farm Credit System Unaccountable
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.
Battery Company Financing Deal Raises Questions About CoBank Lending
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.
Farmers are Struggling. Congress can Help by Confirming Rod Brown
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.
What Happened to Farm Credit Services of Hawaii?
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 ECORA Act would be a Huge Win for Farmers
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:
Farm Credit’s Congressional Testimony Should Raise Serious Concerns
On the heels of November’s hearing to review agricultural credit conditions, in December 2019 the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit held another hearing to receive information from lenders directly, including from the Farm Credit System (FCS), about this important issue.
Farm Credit’s responses did not inspire confidence.
Two lines of inquiry, in particular, should leave observers concerned about Farm Credit’s record of serving underserved groups and its stability in a tough agricultural economy. Rep. Ann Kirkpatrick (D-AZ) , hailing from a region with significant Native American presence, asked: “Have any of you worked with Native American farmers or Native-owned lenders?”
Farm Credit Institutions Protect Profits at Expense of Farmers
There are few things more important in agriculture than making sure that farmers have enough credit to operate their farms. Kansas recognizes this: it gives farmers easy access to credit by providing lenders with some helpful but limited tax incentives for lending to farmers. And the federal government recognizes this to an extent by granting the Farm Credit System (FCS) – and only the Farm Credit System – an exemption from federal income taxes on profits earned on real estate lending.
Some Farm Credit institutions are jealously guarding this tax advantage at the expense of farmers. Continue Reading
What the FCA Chairman told Congress about Farm Credit
Last month the House Agriculture Subcommittee on Commodity Exchanges, Energy, and Credit held a hearing to review agricultural credit conditions and the Farm Credit System’s (FCS) role in creating those conditions. Testifying before the subcommittee was Glen Smith, the Chairman of the Farm Credit Administration (FCA), the FCS’s regulator.
The question: should we be worried about agricultural credit conditions?
Key Topics for Farm Credit Oversight Hearing
Last week the House Agriculture Committee announced that it would hold an oversight hearing on the Farm Credit System (FCS) and its regulator, the Farm Credit Administration (FCA). It’s been four years since this committee has held a formal oversight hearing – in the meantime, it held a (scathing) “review” in 2017 following the Senate Agriculture Committee’s oversight hearing in 2016 and the House Appropriations Agriculture Subcommittee’s oversight hearing in 2017.
It’s safe to say that Farm Credit is due for another oversight hearing.
In the past two years, Farm Credit has earned its reputation for mission creep and inadequate service to the farmers who need the most support. In the past two years, Farm Credit has extended loans to health care and senior living facilities, to home-buyers of dubious qualification, and to professional show-jumpers purchasing equestrian property from a billionaire. These are noteworthy and illustrative, but not exhaustive. While Farm Credit has strayed far from its mission, it has become a massive entity, with more than $352 billion in total assets.