It’s no secret that rural America has seen tough times in recent years. Low commodity prices, tariffs and poor weather haven’t helped. In the words of Compeer Financial’s CEO Rod Hebrink, “There’s a bleeding going on.”
Compeer Financial is the newest association in the Farm Credit System. It’s one of the largest too, with $20.75 billion in total assets. And Hebrink is correct in saying that “there’s a bleeding going on.”
But is Compeer Financial doing enough to stop it?
On April 2, Hebrink testified before the House Appropriations Subcommittee on Agriculture, and he outlined how Compeer is helping its customers in this tough credit environment. There’s increased patronage payments and a commitment to help farmers, especially dairy farmers.
What’s more interesting is what’s left unsaid.
While Hebrink talks a big talk about the struggles of dairy farmers and how Compeer is helping, the data tells a different story. According to Compeer’s 2018 report, Compeer’s portfolio distribution only saw the tiniest uptick of .1% in loans to dairy farmers. Most everything else stayed the same, including the nebulous “other” category. What could be included there?
You don’t have to look far – Compeer advertises it prominently. Compeer’s lending portfolio includes lending for senior living facilities, health care facilities, and rural business investment companies.
It’s as plain as day that these aren’t farms. They aren’t electric or telephone cooperatives. They aren’t even agribusinesses, for the most part.
And they’re important facilities for the prosperity of rural America, to be sure. But are they within the FCS’s mandate? The FCS’s mission is to furnish America’s farmers, ranchers and producers with sound, adequate, and constructive credit. Should that extend to services and facilities which exist alongside farms, but are not farms themselves?
Most Americans would say no, if it comes at the expense of helping more farmers, ranchers and producers. And the fact that more than a grain of Compeer’s portfolio goes to this nebulous “other” category should shock taxpayers who provide the FCS backing. And it should shock the members of Congress who represent taxpayers as well.
There’s a bleeding going on. And Compeer isn’t doing enough to staunch it.