Organizations Urge Congress to Reject FCS Proposal

Release Date: 

11/19/2007

Contact(s): 

Traci Bruckner, tracib@cfra.org, (402) 687-2103 ext. 1016 Chuck Hassebrook, chuckh@cfra.org, (402) 687-2103 ext. 1018
Lyons, NE – On Friday, November 16 the Center for Rural Affairs along with 27 other organizations from across the United States released a letter urging Senators to reject the proposal to expand the lending authority of the Farm Credit System (FCS), unless that proposal also includes clear and binding provisions that direct FCS to do more for small and mid-size, beginning and socially disadvantaged farmers and ranchers.
“Access to credit is one of the largest impediments to farm entry for small and mid-size, beginning and socially disadvantaged farmers and ranchers,” noted Traci Bruckner, Assistant Director for the Rural Policy Program at the Center for Rural Affairs. Bruckner continued, “The Farm Credit System, a Government Sponsored Entity (GSE), is growing significantly, by roughly ten percent per year, and that growth should position them to better assist these farmers and ranchers, not to solely expand authorities in areas other than financing farmers and ranchers.”

The FCS lending portfolio is focused on lending to large, strong borrowers. Their portfolio of loans at the end of 2006 consisted of 58% of its lending in loans over $500,000 and 24% of its lending in loans over $5 million.

The signing organizations recommend that Congress re-evaluate credit in rural America and address the clear needs of these farmers and ranchers, in particular those that are 34 years of age and younger.  As part of that review it is important to examine the role that FCS lending is playing in the overall access to credit for independent diversified family farm operations.  In 1978, the Census of Agriculture reported that there were over 350,000 farmers age 34 and younger listing farming as their primary occupation. In 2002, the Census of Agriculture showed a precipitous drop to roughly 70,000 in that age bracket that listed farming as their primary occupation.

“Many farmers and ranchers with whom we work have been critical of the Farm Credit System, and they say they are really no different than a traditional bank and they tend to be considered the most conservative lenders in the marketplace. The system as a whole has not demonstrated a serious commitment to addressing the challenges small and mid-size, beginning and socially disadvantaged farmers and ranchers encounter. These farmers and ranchers should be at the core of their mission” adds Bruckner.

To see the letter and a list of signatories go to: http://www.cfra.org/files/farmcredit-Nov16.pdf
For additional information visit: http://www.cfra.org/policy/2007

 

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