As taxpayers, small farmers, concerned citizens and agricultural lenders sound the alarm as it relates to the reckless lending practices of the Farm Credit System, national reporters are performing their due diligence and taking notice.
This week, Politico Magazine published an all-inclusive article on the federal government’s sprawling – and largely unchecked – portfolio of loans. The investigative piece states that agricultural lending and specifically the Farm Credit System have gone deeply awry, losing focus of its original mission while putting the American taxpayer on the hook for its toxic loans.
According to the article:
“The Agriculture Department, in addition to those absurdly risky loans for biorefineries and broadband, makes absurdly safe loans to rural electric cooperatives and telecoms, so safe they’re sometimes described internally as “profit centers.” Those New Deal-era credit programs made sense before rural America had electricity and phone lines, but now they’re essentially boondoggles that subsidize rural ratepayers—not to mention suburbanites around Waco, Atlanta and Washington, D.C., thanks to a “once rural, always rural” loophole. Meanwhile, a branch of the federally chartered and heavily subsidized Farm Credit System, created a century ago to extend affordable financing to small-scale agriculture, recently lent Verizon $725 million to buy a European cellphone company. Private lenders complain that Farm Credit takes advantage of its privileged status to cherry-pick the most creditworthy borrowers with remotely plausible links to rural America, although its loans to help a billionaire’s ex-wife launch a winery in Virginia and an American Idol producer build an equestrian center in South Dakota have gone bust, too.”
To read ‘The (Real) Bank of America,’ click here.