It’s no secret that farmers, especially young, beginning and small farmers, are struggling in this economy. To survive through the tough times, and to thrive during the good times, farmers need reliable access to credit. And the Farm Credit System’s (FCS) greatest defenders always say that the FCS and the Farm Credit Administration (FCA) are here to “ensure a safe, sound, and dependable source of credit and related services for agriculture and rural America.”
Except, of course, when it decides not to.
In Indiana, where the leading agricultural commodities are corn and soybeans, which have dropped drastically in price over the past five years, the FCS is in a credit tactical retreat. According to an article by Hoosier Ag Today, Gary Coleman, the Regional Vice President of Farm Credit Mid-America, says that “2017 will be the year some hard decisions will have to be made.” It’s true that farmers will have to face hard decisions with lower commodity prices, but is the FCS the institution to be leading this belt-tightening? Shouldn’t the FCS be the safety net – the “safe, sound, and dependable source of credit” that rural America needs?
And how many times have we had to hear some variation on the phrase “The Farm Credit System (FCS) is well-capitalized”? The House Committee on Agriculture heard it during their oversight hearing of the FCS in December 2015, and that same statement was offered again by FCA Chairman Ken Spearman at the Senate Committee on Agriculture’s oversight hearing in May 2016.
The numbers don’t lie: as of the end of September 2016, the FCS held $314.3 billion in assets. And Gary Coleman’s own Farm Credit Mid-America held $22.1 billion in assets in 2015. Farm Credit Mid-America and the FCS as a whole seem relatively well-capitalized on the surface – shouldn’t they be there to provide assistance when farmers need it most? And if they aren’t able to, is it because they either 1) care about profits over people or 2) aren’t as stable and well-capitalized as they claim?
Something doesn’t seem right here. The FCS should be standing by farmers through thick and thin, but they’re doing anything but that right now. If the FCS isn’t willing to follow its mission, then what is its purpose? If it isn’t willing to meet dire needs for the public good then should it still be tax-exempt? Congress needs to get to the bottom of this soon before farmers feel the worst consequences of the FCS’s inaction.