ABSTRACT

Farm Credit System [April 6, 2015]   [open pdf - 674KB]

"The Farm Credit System (FCS) was created to provide a permanent, reliable source of credit to U.S. agriculture. When Congress enacted the Federal Farm Loan Act in 1916, credit often was unavailable or unaffordable in rural areas. Many lenders avoided farm loans due to the inherent risks of agriculture. Statutory authority is in the Farm Credit Act of 1971, as amended (12 U.S.C. 2001 et seq.). Comprehensive changes were enacted in the Agricultural Credit Act of 1987. The FCS is authorized by statute to lend to farmers, ranchers, and harvesters of aquatic products. Loans may also be made to finance the processing and marketing activities of these borrowers; for home ownership in rural areas; certain farm- or ranch-related businesses; and agricultural, aquatic, and public utility cooperatives. FCS is a commercial for-profit lender and is 'not' a lender of last resort. Borrowers must meet creditworthiness requirements similar to those of a commercial lender. FCS has 'young, beginning, and small' (YBS) farmer lending programs, but without targets or mandates. The FCS holds nearly 41% of the farm sector's total debt (slightly higher than the nearly 40% share of commercial banks) and has the largest share of farm real estate loans (46%). As of September 2014, FCS had $208 billion in loans outstanding, of which about 46% was in long-term agricultural real estate loans, 22% in short- and intermediate-term agricultural loans, 14% in loans to agribusinesses, 8% in energy and water/waste water loans, 4% in export financing loans and leases, 3% in rural home loans, and 2% in communications loans."

Report Number:
CRS Report for Congress, RS21278
Author:
Publisher:
Date:
2015-04-06
Series:
Copyright:
Public Domain
Retrieved From:
National Agricultural Law Center: http://www.http://nationalaglawcenter.org/
Format:
pdf
Media Type:
application/pdf
URL:
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