Neglect

Farm Credit Looms Larger and Larger

Year after year, the Farm Credit System (FCS) has grown larger and larger. A year ago, the size of the FCS was $291 billion in total assets. And as of March 31, 2016, the FCS’s size was $315 billion in total assets. 

Let that number sink in.

Most community banks, by total asset size, are a drop in the bucket compared to what the FCS has become. If the FCS were considered a bank, it would be the eighth largest in the US. And in just 6 months, the FCS grew by $24 billion – 8 percent.

The FCS’s defenders might claim that this has been an extraordinarily fruitful year, but the truth is in the data. Five years ago, the FCS had $230 billion in total assets. Ten years ago, the FCS had $162 billion. And 13 years ago, as far back as the Farm Credit Administration provides data, the FCS had $115 billion. In only 13 years, the FCS has nearly tripled in size.

Every financial institution has its good years and bad years, but this trend is outrageous. And with all of this explosive growth, you’d think that the FCS would be using these new resources to help young, beginning and small farmers, right?

Wrong. 

The FCS has continued to lend to telecoms, foreign subsidiaries of US companies and consumers looking to invest in luxury houses and vacation properties. And all of this, of course, while it receives tax breaks to help the young, beginning and small farmers it’s been short-changing 

But following an investigation by The Washington Post and commentary from consumer advocate Ralph Nader, legislators and policymakers have noticed that something is amiss.

The tide is turning, but now’s the time to press the advantage – Congress needs to reform the FCS, before it’s too late.

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Check the Record – Brother, Can You Spare an Oil Lease?

Oil derricks. Vertical wells. Hydraulic fracturing. Doesn’t sound like agriculture, does it? It does to the Farm Credit System (FCS).

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Check the Record – FCA Admits to Leaving Out Small Farmers

The past 10 years have seen the FCS’s investment in young and beginning farmers stagnate, while loans to small farmers have dropped surely and steadily.

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