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Study Slams Farm Credit System

Nebraska, the heartland of America, where corn and wheat grow tall and cattle grow fat. An outside observer would think that in Nebraska, of all places, there would be a lot of support for the Farm Credit System (FCS), right? Take another guess.

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Deposits by Any Other Name

Are the Farm Credit Administration and the Farm Credit System taking too much liberty in how they follow their own rules?

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FCA short changes Young, Small and Beginning Farmers

The Farm Credit Administration (FCA) likes to bury the truth under mountains of data and vague platitudes, but even still, we’ve found the answer to our question: how much of the Farm Credit System’s (FCS) lending is to young, small and beginning farmers?

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CoBank Hangs Up on Farmers and Lends to Telecoms…Again

If you thought CoBank had put a stop to their irresponsible mission creep, you’d be dead wrong. This time, CoBank, an affiliate bank of the Farm Credit System (FCS), has fallen back on one of its old standards: lending to huge telecoms.

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Cobank props up foreign subsidiary of failing publicly-traded lumber company

Yes, you read that correctly. CoBank, a Farm Credit System (FCS) affiliate worth over $100 billion, wants to finance a failing, foreign company with tax-exempt, taxpayer-backed dollars.

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Farm Credit System: Luxury Housing Division

Eight and a half miles south of Union Station, Denver’s central hub, sits a majestic mansion. So why is the Farm Credit System (FCS) attempting to find a buyer so it can finance its sale?

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Here Today, Gone to Maui

While the Farm Credit System unabashedly advertised for recreational properties in high end magazines in the past, take note of these newer ventures: luxury properties in Hawaii.

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Funding Luxury? Par for the Course

Following reports that Carolina Farm Credit underwrote publicly backed loans to maintain a luxurious private golf course, the Farm Credit System (FCS), through its affiliate CoBank, has made the news again.

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Is the Farm Credit System trying to add to the student loan bubble?

The Farm Credit System clearly has no affiliation to the US Department of Education but has this GSE become the newest federal student loan provider?

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CoBank’s Credibility Problem

After forking over an astounding $1.5 billion in credit to four of the world’s largest telecom corporations, CoBank – Farm Credit’s largest subsidiary and supposed ag lender– is at it again, this time committing hundreds of millions of dollars in new loans to major utility companies across the country.

Here’s how it unfolded:

  • On March 10, the GSE giant participated in a $450 million unsecured revolving credit facility for a California-based water utility provider. As reported in Farm Credit Watch, CoBank acted as a co-syndication agent for the NYSE-listed corporation.
  • Just days later, Fitch Ratings Service affirmed the rating for Georgia Transmission Corp., an electrical infrastructure provider, thanks in part to a CoBank-led, $250 million revolver that was established in March 2013 and later renewed until March 2018.
  • On April 13, CoBank helped Black Hills Corp., a South Dakota-based natural gas and electric utility provider, close on a two-year, $300 million unsecured term loan.

While it’s anyone’s guess as to why CoBank’s regulator does not speak out against such egregious lending activities, the fact remains that these large customers have more than enough capacity to engage the private sector rather than tap into the taxpayer-subsidized credit provided by CoBank and other Farm Credit associations.

CoBank’s seemingly endless portfolio of non-agricultural loans is unsettling because it represents a wildly stretched interpretation of the Farm Credit Act of 1971. While lawmakers passed the decades-old legislation with the intent of enabling lending to important activities and enterprises to support rural America, they likely did not foresee Farm Credit viewing it as a green light for its current “anything goes” approach.

CoBank will continue to run amok until its activities are reined in and refocused on the farm. This begs the question, when will Congress finally step in to take a look at these non-agricultural loans from CoBank and other large GSE’s masquerading as farm lenders?

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