Leave it to the Farm Credit System (FCS) and its defenders to say the obvious and do little to actually bring it about. Young, beginning and small farmers across the country are hungry for credit, and the FCS has an abundance of resources to lend to them. According to Farms.com, the Farm Credit Council’s (FCC) Mark Hayes recently said
“If someone is going to get started in farming they need to be able to get to the point of being commercially viable.”
Hold on. The FCS and its advocates are touting the importance of increasing loan amounts to help support more beginning farmers.
Then why isn’t the FCS lending to more beginning farmers?
The FCS has $320 billion in assets and would be the seventh largest bank in the United States if it were chartered as such and held to the same rigorous regulatory standards. It has the resources to help support beginning farmers, but only a measly 16 percent of all new loans are going to them.
What’s more, the FCS is a government-sponsored enterprise (GSE). It has the implicit backing of the federal government and is supposed to act in the public’s interest by sustaining and promoting American agriculture. That’s why, in the Farm Credit Act of 1971, Congress mandated that the FCS create a program to serve the needs of young, beginning and small farmers.
The FCS is saying one thing and doing the opposite, and young, small and beginning farmers are losing out. That’s shameful, and for a GSE that was created to preserve and maintain American agriculture, it amounts to malpractice.
The FCS needs to follow through on its rhetoric and help young, beginning and small farmers. It has a mandate to do so. The Farm Credit Administration (FCA), for all of its faults, is well-placed to crack down on the FCS and set minimum lending quotas for young, beginning and small farmers. And if the FCA doesn’t do that through regulation, then Congress needs to do it through statute.