On June 3rd, Florida’s St. Pete Catalyst reported that Compeer Financial – a farm credit institution – recently participated in a credit facility of $175 million for Growve, “a St. Petersburg company that specializes in acquiring and growing smaller health, wellness and beauty brands.” Beauty products? Is Compeer using its lending capacity to develop lipstick for pigs or is it only pretending that it is a taxpayer-supported lender dedicated to agricultural credit?
Formed four years ago through the merger of three Farm Credit System (FCS) institutions in Minnesota, Wisconsin and Illinois, Compeer Financial is a massive Farm Credit association, holding almost $25 billion in total assets. As an FCS institution, Compeer is obligated to help America’s farmers, especially young, beginning and small farmers. And it claims as much: “Compeer Financial is a member-owned, Farm Credit cooperative serving and supporting agriculture and rural communities.”
Two immediate issues come to mind when considering this loan to a beauty company. For one, why is a Farm Credit institution headquartered in Minnesota extending a loan to a company based in Florida? And more importantly, why is a farm credit institution lending to a company that has absolutely nothing to do with agriculture? Don’t let the name or the imagery on the website fool you: Growve advertises that it grows “health and beauty brands.” It isn’t anything close to an agricultural business.
If anything, Compeer’s loan to Growve is more in line with another non-agricultural sector that Compeer has taken strong interest in – health care. Compeer hosts pages on its website for financing for senior living facilities and for health care facilities. And on June 14th, Minnesota’s Albert Lea Tribune reported that the new “MercyOne Albert Lea Family Medicine & Specialty Care clinic” will soon open and that “a loan is also expected through Compeer Financial.”
This new trend doesn’t seem to shock regulators, who should be mortified that Compeer is extending these loans. At an oversight hearing of the Farm Credit Administration (FCA), FCS’s regulator, a member of Congress noted that “Compeer Financial Farm Credit has joined with local banks, credit unions and the USDA in a public-private partnership to help finance critical access to hospitals and senior living facilities.” Unperturbed by this, the FCA’s Chairman merely reflected that the FCS “bump[s] up against our [sic] authority.”
Lending to a company that grows health and beauty brands, and for health care facilities – no matter how well-intentioned – is not what the FCS was established for. The FCS was established to improve the “well-being of American farmers and ranchers by furnishing sound, adequate, and constructive credit and closely related services to them, their cooperatives, and to selected farm-related businesses necessary for efficient farm operations.” A clinic and a health and beauty company aren’t even close to fitting the bill.
Pretending that Compeer is doing its best to serve the needs of farmers is just putting lipstick on a pig. Based on its congressional testimony, the FCA doesn’t seem willing to keep Farm Credit focused on agriculture. If Congress wants to hold Compeer accountable, it will need to investigate Compeer’s loan to Growve.