The Farm Credit System (FCS), as a government-sponsored enterprise (GSE) tasked with providing reliable access to credit for all American farmers, ranchers and producers, has special mandates. Arguably the most important mandate for the FCS is to provide reliable access to credit for young, beginning and small (YBS) farmers, ranchers and producers. The law is abundantly clear on this: “Each Federal land bank association and production credit association shall prepare a program for furnishing sound and constructive credit and related services to young, beginning, and small farmers and ranchers.”
But it’s no secret that the Farm Credit System (FCS) has a lackluster track record when it comes to serving the credit needs of YBS farmers, ranchers and producers. In fact, FCS associations aren’t even reaching the goals that they’ve set for themselves on YBS lending. What’s even worse is that the Farm Credit Administration (FCA), which is tasked with publishing an annual report on the System and its lending to YBS farmers, ranchers and producers, hasn’t produced its Fiscal Year 2017 report as of late July 2018.
Is there a culture of indifference to YBS farmers, ranchers and producers in the Farm Credit world? One could draw that conclusion given the FCS’s track record.
But right now isn’t the time for the FCS to continue its lackluster performance. Several of America’s trading partners, including China and the European Union (EU), have levied tariffs – taxes levied on a particular kind of import or export – on American agricultural products. According to Politico, China alone has levied tariffs amounting to “$34 billion worth of American products targeting soybeans, cotton, rice, sorghum, beef, pork, dairy, nuts and produce.”
$34 billion in tariffs, even if spread over numerous commodities and products, could sharply disrupt American agriculture. And young, beginning and small (YBS) farmers, ranchers and producers would be the hardest hit, because their farms and operations have the thinnest margins.
President Trump has announced that the US Department of Agriculture (USDA) will be providing $12 billion in “emergency relief” for farmers affected by the tariffs. Only time will tell if the relief will work. In times of uncertainty like these, FCS associations should be front and center, shouting from the mountaintops that they are ready to provide solid, dependable and accessible credit to YBS farmers, ranchers and producers. Where are they?
America’s YBS farmers, ranchers and producers are the future of American agriculture – we need to do all we can to help them. And that means it’s time for Farm Credit to do its fair share.