The Farm Credit System (FCS) is supposed to stand by young, beginning and small (YBS) farmers, ranchers and producers, making sure that they have reliable access to credit. And Farm Credit talks a big talk about the work it does to help YBS farmers.
Does it actually help? Last week, the Berkshire Eagle of western Massachusetts published a letter to the editor – a neighbor wrote in to call attention to the troubles of one of the last dairy farms in that part of the state. After working on the farm every day for forty years, the owners of Hav’s Farm are down but not out. They’re struggling with low milk prices, high feed costs and the fallout of a fire that could have engulfed the whole farm. Hav’s Farm has turned to a Go Fund Me campaign to stay afloat
Something’s wrong with this picture. Why is a small farmer turning to Go Fund Me? Shouldn’t Farm Credit East, the Farm Credit association with jurisdiction, help this small farm?
“With milk prices low and the projected $60,000 needed just for feed, Fred Havill’s application for a loan from the farm credit agency which usually lends to him was rejected. They think Fred should just give up. But Fred Havill doesn’t want to give up!” [emphasis added].
A small farmer has turned to crowdsourcing to stay afloat – this is unacceptable. Hav’s Farm’s difficulties – low commodity prices, high operating costs and plain old bad luck – are exactly the reasons why Farm Credit is legally required to serve YBS farmers. YBS farmers are vulnerable and they need reliable access to credit. They don’t need to be told to “just give up.”
“Just give up.” This rejection is likely coming from the same Farm Credit association that helped create “a shell corporation to funnel federal money” for an unscrupulous customer. It’s likely coming from the same Farm Credit association that has underserved Maine’s YBS farmers so much so that they have decided to create their own financial entity to serve their credit needs. Farm Credit East’s record leaves much to be desired.
Farm Credit East’s record isn’t that much behind the Farm Credit System’s as a whole. In 2017, Farm Credit failed YBS farmers. Young farmers saw an 11.6 percent drop in the number of new loans from FCS. Beginning farmers saw 9.8 percent fewer new loans originated by FCS. And small farmers saw an 11.9 percent drop in the number of new FCS loans.
Taxpayers should be outraged. If we are going to be the fiscal backstop for Farm Credit’s misadventures, shouldn’t we at least have a say in its mission? If its mission is to help YBS farmers, shouldn’t it be carrying out that mission? If it isn’t then who will hold Farm Credit accountable?
The Farm Credit Administration (FCA), Farm Credit’s regulator, probably won’t do that. But Congress can. The House and Senate Committees on Agriculture would do well to investigate Farm Credit East and Farm Credit as a whole to see whether it is fulfilling its mission to serve YBS farmers. America’s taxpayers demand it.