Yankee Farm Credit, a tiny Farm Credit System (FCS) association serving Vermont and part of New Hampshire, has merged with Farm Credit East, serving Connecticut, Maine, Massachusetts, part of New Hampshire, New Jersey, New York, and Rhode Island.
Farm Credit East gleefully announced the merger early this month, ringing in 2022 by sharing the news that “the merged association will operate under the legal name of Farm Credit East, ACA.”
Is this a merger or just absorption?
This merger isn’t exactly even-sided: Farm Credit East has total assets of nearly $8.9 billion, while Yankee Farm Credit had, as of September 30, 2021, total assets of nearly $640 million. What value will this absorption provide for the farmers and producers in Farm Credit East’s new expanded district?
Farm Credit East’s CEO, Mike Reynolds, claims that, “With this merger comes new opportunities, including an expanded pool of talented staff, experience and resources to enhance member service and allow Farm Credit to continue delivering long-term value for our customer-owners.”
Reynolds leaves out that this new merger will likely mean that at least one office location closes as the associations consolidate. Practically, that means that farmers and producers in affected regions will likely have to travel farther to get their credit needs fulfilled. But a consolidation also means that an entire board for a Farm Credit association disappears, likely limiting local input and governance by small farmers across affected regions.
This absorption is bad enough for farmers and ranchers in the affected regions who want their credit services from as local a source as possible and who want local representation on their local Farm Credit association’s board. But the difficulties they will likely face aren’t new when looking at Farm Credit’s history. The number of Farm Credit associations nationwide has dropped sharply over the past 35 years: in 1987 there were fewer than 400, with only 95 roughly two decades later. With this newest consolidation, there are now only 66 associations serving the whole country.
With so few associations, it’s hard to think that Farm Credit’s service is local enough to the farmers and producers it was created to serve. That’s worthy of the scrutiny of Farm Credit’s regulator, the Farm Credit Administration (FCA), which has the authority to review mergers. And if the FCA Board decides to not look into the issue, it’s up to Congress to tackle it head on; farmers and producers across the country are counting on it.