ABA President and CEO Rob Nichols today wrote to Senate Agriculture Committee leadership urging lawmakers to hold annual oversight hearings of the Farm Credit Administration — the primary federal regulator of the government-sponsored Farm Credit System. Nichols cited the FCS’ rapid growth over the past decade and its declining efforts on behalf of young, beginning and small farmers as reasons why stronger oversight is need.
In the last decade, the Farm Credit System’s assets more than doubled from $140 billion to $304 billion. And while the GSE continues to see its profits increase, Nichols pointed out that the FCS’ effective tax rate has declined on an annual basis. The FCS has also seen a marked decrease in its efforts to provide credit to YBS farmers — loans to these farmers have dropped from 30 percent of FCS’ portfolio in 2003 to less than 19 percent in 2015.
“Considering that this GSE was created with specific tax advantages to ensure YBS farmers have a lender who can provide competitive credit, we believe that stronger oversight is needed to ensure compliance with their obligations to serve certain market segments,” Nichols wrote. “Credit for rural America is too valuable…and there must be in-depth oversight to ensure credit availability for all farmers and ranchers.”