The 2018 midterm elections yielded big gains for Democrats in the House of Representatives. Fortunately, reforming the Farm Credit System (FCS) isn’t a partisan issue, it’s a common sense one. And incoming chairman of the House Committee on Agriculture, Rep. Collin Peterson (D-MN), is set to take a close look at Farm Credit’s regulator, the Farm Credit Administration (FCA), in the 116th Congress. In a recent interview with The Fence Post, ranking member Peterson“said he would lead the committee to turn to oversight of the agencies over which the committee has jurisdiction. Those are USDA, the Commodity Futures Trading Commission, the Food and Drug Administration and the Farm Credit Administration.”
Farm Credit gets away with a lot – too much. The spirit of the Farm Credit Act is crystal clear: the FCS was created to provide reliable access to credit for America’s farmers, especially it’s young, beginning and small farmers. It wasn’t created to lend to large telecoms, public companies building “server farms” and consumers in the market for luxury housing.
It has been almost three years since the House Agriculture Committee reviewed the FCS and brought the FCA before the committee. Since then, the FCS’s CoBank has dropped the ball on helping its customers, local Farm Credit institutions are merging and leaving behind customers, and some associations – like Lone Star ACA – are at risk because of “financial irregularities.”
But the worst problem, by far, is that Farm Credit has failed young, beginning and small farmers. Loans to young, beginning and small farmers fell across the board in 2017. And Farm Credit hasn’t explained why.
Farm Credit has gotten away with this only because the FCA hasn’t cracked down like it should. And the FCA will only crack down if Congress shows that it means business. Ranking member Peterson has the right idea – more oversight of the FCA. Annual oversight hearings of the FCA and the FCS are a great first step in making sure they’re held accountable.