News from the Council

Farm Credit Remains Strong, Vital Credit Source For U.S. Agriculture and Rural America

June 26, 2014

Farm Credit Remains Strong, Vital Credit Source For U.S. Agriculture and Rural America

Bob Frazee, CEO of MidAtlantic Farm Credit, Testifies Before House Agriculture Subcommittee

WASHINGTON – The Farm Credit System remains financially strong, economically vital, and focused on fulfilling its mission of service to U.S. agriculture and rural America, said Bob Frazee, CEO of MidAtlantic Farm Credit, in testimony June 25 before a House Agriculture subcommittee.

“We continue to make credit available to all segments of agriculture, including commercial producers as well as young, beginning and small farmers and ranchers,” said Frazee, who testified at the hearing to examine rural credit conditions held by the House Agriculture Committee's Subcommittee on Livestock, Rural Development and Credit.

“We support agricultural cooperatives, rural infrastructure and the marketing channels that agriculture depends on to sell their product and we serve the needs of rural communities to the extent our authority permits,” Frazee added. “We are proud of our commitment to rural America.”

Members of the Subcommittee, led by Chairman Rick Crawford (R-AR) and ranking member Jim Costa (D-CA), heard from two panels of witnesses that included representatives from the Farm Credit Administration, the Farm Service Agency, the Federal Reserve Bank of Kansas City, Farmer Mac, and local banks.

Farm Credit, with its cooperative ownership structure and its mission of service to agriculture and rural America, makes Farm Credit exceptionally well suited to serve all types of agricultural producers and the cooperatives and farm-related businesses upon which producers rely, through good times and bad, Frazee said.

“It should be of no surprise to the Committee that when you look across Farm Credit’s loan portfolio you will see represented in it the broad array of operations that are U.S. agriculture,” Frazee said. “The Farm Credit Act was designed to ensure that we can continue to meet the needs of agriculture, cooperatives and rural infrastructure as they have developed.”

Farm Credit, Frazee emphasized, remains focused on working to help its borower-owners succeed in their operations.  .

“When our customer-owners achieve success, our business will succeed as well. Farm Credit’s lending relationship with our member-borrowers is based on constructive credit over the long haul – we make loans, retain loans and service loans,” Frazee said. “Farm Credit does not enter and exit agricultural lending as farm profitability waxes and wanes.”

Frazee noted that as a part of its mission to serve all types of agricultural producers and rural America special attention is paid to making sure programs are in place to meet the needs of  young, beginning and small farmers.   In 2013 Farm Credit institutions made $8.3 billion in new loans to young farmers, almost $11 billion in new loans to beginning farmers and $11.4 billion to small farmers, Frazee told the Subcommittee.

“We work hard to serve the needs of young, beginning and small farmers,” Frazee said. “Across the country we do this not only by fulfilling their credit needs but also by supporting training and education programs, hosting seminars on intergenerational transfer of family farms, on risk management techniques and establishing and maintaining effective business plans.”

An archived webcast of the June 25 hearing is available on the House Agriculture Committee's website at agriculture.house.gov.

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The Farm Credit System is a federally chartered network of borrower-owned lending institutions. Established in 1916, the Farm Credit System is comprised of 82 privately owned institutions. This includes four wholesale banks and 78 direct lending local associations. Farmers, ranchers, agricultural cooperatives, rural utilities and others in rural America cooperatively own all of these institutions. The four wholesale banks include CoBank. In addition to lending to Farm Credit associations, CoBank lends to agricultural, rural electric and telephone cooperatives, as well as rural water and sewer systems, broadband providers, agribusiness and to support exports. Farm Credit’s mission is to provide sound and dependable credit and other related financial services to our owners and others consistent with the eligibility criteria set out in the Farm Credit Act. The Farm Credit Council is the national trade association representing the interests of the institutions of the Farm Credit System.

 

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Farm Credit by the Numbers

  • 1,062,364
    Number of Loans at Dec. 31, 2016
  • 500,000
    Farm Credit Customers Nationwide
  • $253 Billion
    Total Loan Volume at Dec. 31, 2016
  • $12.2 billion
    New Loans to Small Farmers and Ranchers in 2014
 


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