The COVID-19 pandemic has upended American agriculture, and farmers across the country are feeling the pressure. In these difficult times, Farm Credit should be focused on helping farmers and supporting U.S. agriculture. Instead, Farm Credit seems to care more about expanding the scope of its mission than meeting the needs of the producers it is already mandated to serve.
The Farm Credit System’s (FCS) lobbying group, the Farm Credit Council (FCC), has unveiled a new series of panel discussions called From the Farm Gate — a series ostensibly created to explore issues related to coronavirus that impact those served by Farm Credit. Oddly, in addition to panels on the impact of coronavirus on livestock producers and fruit and vegetable producers, the FCC recently featured a discussion on the COVID-19 pandemic’s impact on rural health care and broadband.
Led by the lead relationship manager for CoBank, the only FCS institution authorized to lend to cooperatives, the discussion included two CEOs: one from a telecommunications cooperative and one from a rural hospital. The point of panel discussion was, on its face, to show how CoBank supports telecommunications cooperatives, which in turn support hospitals during this challenging time.
Clearly telecommunications and health care are crucial national issues. But they are also largely outside of Farm Credit’s congressional mandate. In fact, Farm Credit’s mission in supporting telecommunications is limited to one FCS lender, CoBank, providing loans to cooperative telecommunications firms. This limited interaction with rural broadband makes clear the dubious nature of Farm Credit’s insinuation that it does – or should — play a broad role in supporting health care and rural telecommunications.
While Farm Credit is busy putting together webinars touting specious ties to health care, it is falling short on its mandate to serve farmers and ranchers struggling with economic disruptions caused by coronavirus. Farm Credit not only bungled the implementation of the Paycheck Protection Program, but it has increasingly abandoned its mission of furnishing sound credit to farmers, ranchers and producers. Farm Credit has also failed to meet the needs of young, beginning and small farmers, a class of producers that it is specifically mandated to serve.
Worse, despite Farm Credit’s longstanding difficultly to provide adequate support to the farmers and ranchers it’s obligated to serve, the webinar is just the latest in a series of attempts from Farm Credit to link itself to health care. In 2015, the House Committee on Agriculture grilled the Chairman of the Farm Credit Administration (FCA), the FCS’s regulator, on why it allowed an FCS institution to invest money in a rural hospital. How this was functionally different than a standard loan confounded the committee and should confound any observer. Not deterred by the committee’s much-needed oversight, in 2019 the FCA board approved another “investment” in a “skilled nursing and rehabilitation facility.” Similarly, Farm Credit has tried to slip in lending to noncooperative telecommunications firms and even succeeded in making hundreds of millions of dollars in loans to Verizon.
No one can deny that America’s health infrastructure needs support at all levels, especially during a pandemic. But why is Farm Credit the one to provide that support? Was this kind of activity what policymakers had in mind when they first created it? If not, then why are they now permitting it?
The answer is clear: Farm Credit is not supposed to be in the business of health care. Farm Credit has a particular mission, enshrined in law: “improving the income and 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.”
Only the most expansive, far-fetched reading of this mission would include hospitals and other health care facilities as being eligible for credit and a financial relationship. And as Farm Credit eyes expanding lending to health care facilities, part of a sector comprising nearly one fifth of U.S. gross domestic product, it has demonstrated that it isn’t even able to help those clearly within its mission, especially young, beginning and small farmers.
Congress has shown it’s willing to hold Farm Credit to its mission. The FCA has not. Policy makers will see right through Farm Credit’s ongoing attempts to redefine its mission to include health care. In the face of this blatant mission creep, Congress needs to ask the FCA to explain why it’s allowing Farm Credit institutions to lend outside of their mission, increasingly to medical facilities, while neglecting the needs of farmers and ranchers. The health of American agriculture demands on it.