On February 5, the Farm Credit Council (FCC) sent a letter rife with errors, bent truths and deceptions to the House Committee on Agriculture in an effort to stave off the ever-growing cry for oversight. While trying to obfuscate the actual issues at hand, the FCC’s letter showed how out of touch it is with reality. Despite claiming “to serve agriculture and rural America as Congress intended” (link to another post), we have shown time (link) and time again just how far the Farm Credit System (FCS) has veered from its original charter.
The letter lists the many clients it has served in its 100 years, but conveniently places a catch-all term “others” at the end of the list — a clear effort to downplay its enormous deals with big telecom and other corporate entities like Cracker Barrel restaurants. Sadly, the FCC portrays the efforts of Reform Farm Credit and similar organizations to educate the public as an effort to “mislead” Congress.
Flawed logic, factual errors and logical inconsistencies abound throughout the letter. Despite trying to portray the Farm Credit System as “private” and “cooperatively-owned,” the FCS is a government sponsored enterprise (GSE) and, therefore, is not truly private. As the FCC wails about the purported advantages that commercial banks have, it begs the question of why then do Farm Credit institutions not become banks? The answer is clear: because they do not want to give up the many advantages they have as a GSE.
The FCC tries to spin its involvement in mineral rights retention, as well as its lack of ability to ensure that loans are only going to eligible borrowers, but that assertion just doesn’t hold up. The FCC fails to acknowledge the several complaints filed by insurance departments against FCS or why it refuses to work with state insurance regulators. It trumpets the patronage checks it distributes, but we know it better as an interest rebate — something it can afford to do because it enjoys a lower tax rate than most Americans and most banks as a GSE.
The Farm Credit System is doing whatever it can to hang on to its advantages. But American taxpayers deserve to know why more oversight and accountability of this enterprise is a bad thing.