It’s the end of 2020, and with 2021 fast approaching, many are looking in the rearview mirror at this year’s most memorable events. Reform Farm Credit is no exception. For the Farm Credit System (FCS), 2020 has been a year packed with memorable news.
Earlier this year, Farm Credit acknowledged that Farm Credit Services of Hawaii was defunct – it was absorbed by American AgCredit based in California. While the number of associations dwindles, the overall size of the System grows larger and larger, ballooning from $353 billion in September 2019 to nearly $385 billion in September 2020.
Farm Credit only grew this year while tens of thousands of farmers, ranchers and producers struggled due to the COVID-19 crunch. Instead of extending loans to farmers in the middle of the crisis and desperately in need, Farm Credit urged them to “try applying through the commercial bank with whom they have a depository relationship.” 2020 has seen Farm Credit tell its customers, when the chips were down, to get help from their local bank. If Farm Credit wasn’t already failing farmers by then, it certainly did later in the year, leaving young, beginning and small farmers in the dust and asking the Farm Credit Administration (FCA), its regulator, to put in place a regulation that could leave farmers with cash flow problems.
These are bad on their own, but Farm Credit likes to double down. While leaving farmers behind, it extended financing to a battery company, a for-profit broadband company, solar plants with a long-term contract to supply Facebook’s data center, a private telecom, and a packaging conglomerate. If those weren’t bad enough, a Farm Credit lender even advertised lending for “non-agricultural purchases.”
In addition to every problem facing farmers in normal years, this year has heaped on new challenges. In the face of these challenges, farmers looked toward an institution that was created to help “in good times and in bad.” In the bad times, Farm Credit was there for telecoms, a battery company and large conglomerates. It has truly been a banner year for Farm Credit’s incompetence in actually serving America’s farmers.
Stress and crisis often show what works and what doesn’t. The stress of 2020 showed that Farm Credit wasn’t there for farmers in the bad times, and if the years preceding 2020 were the good, Farm Credit still wasn’t there for America’s farmers. There is some silver lining – there’s now clarity. Congress needs to act on this clarity to reform the System and truly make sure it can serve farmers in good times and in bad. There are millions of Americans counting on it.