And now we can see something close to an opposite trend. Almost.
Over the past 14 years, while the FCS has exploded in size, the number of constituent associations has decreased steadily. In 2002 there were 117 associations. Now, only 14 years later, that number has decreased by a third – there are only 78 associations.
Many people would see this as a sign of growing efficiency – the FCS is consolidating and streamlining. But there’s too much that’s lost when associations grow too big.
When associations start to span multiple states and economic regions, their leadership becomes out of touch with their member customers – there’s a profound loss of connection to the area and the people who live, work and farm in it. And that has been happening increasingly as associations have gotten bigger – they’ve begun treating Big Ag as their main customer while they leave the small, young and beginning farmer behind.
And there’s a huge merger in process that would reduce the number of associations even further. AgStar, serving parts of Minnesota and Wisconsin, Badgerland Financial, serving southern Wisconsin and 1st Farm Credit Serves, serving Illinois, are slated to merge into a new association, Compeer Financial. With $18.5 billion in projected assets, Compeer will be the third largest FCS association. Its jurisdiction will span from just north of St. Louis, Missouri to beyond Duluth, Minnesota.
Would anyone seriously believe that the new leadership of Compeer will be able to understand, know and serve local farmers from areas as distant as Lax Lake, Minnesota and El Dara, Illinois?
As a government-sponsored enterprise (GSE), the FCS has a duty to serve those farmers who need reliable access to financing the most – young, beginning and small farmers. But when associations keep merging and growing so large and unwieldy, they start to focus their financing efforts on bigger and bigger agricultural operations to the detriment of young, beginning and small farmers. That isn’t right.
The FCS was created to serve those who need it the most, but that can’t happen if it grows to big. Congress needs to keep the FCS in check and investigate whether these mergers will actually help the FCS fulfill its mission.