By Bert Ely A recent article in the Economic Review published by the Federal Reserve Bank of Kansas City inadvertently showed how the FCS’s very favorable tax treatment has distorted agricultural lending competition between banks and the FCS. The article, titled “Competition in Local Agricultural Lending Market: The Effect of the Farm Credit System,” included
Author Bert Ely
By Bert Ely As FCW reported last month, Kansas banker Leonard Wolfe testified on ABA’s behalf at the May 19 oversight hearing the Senate Agriculture Committee held on the FCS and its regulator, the Farm Credit Administration. After he testified, Leonard wrote an opinion article for Agri-Pulse, titled: “It’s time to reform the Farm Credit
On May 19, the Senate Agriculture Committee held an oversight hearing on the FCS and its regulator, the Farm Credit Administration (FCA).
On April 11, The Washington Post ran a long and very critical article on the FCS that was neatly summarized in its headline: Critics say Farm Credit System needs to be reined in.
Just 4,458 persons or entities had each borrowed at least $5 million from the FCS in 2015. Can taxpayer-subsidized financing be justified for any of these borrowers?
The council’s five-page, histrionic rebuttal makes numerous false assertions about the FCS’s lending and other practices that House Ag Committee members had sharply criticized.
Usually witnesses, especially those from a federal agency overseen by the committee whose members posed the questions, respond quickly and fully to those questions. It is not smart for an agency to do otherwise. However, the FCA seems to be the exception as 57 days later it still has not answered the questions put to it at the hearing.
The House Agriculture Committee is scheduled to hold a hearing on the Farm Credit Administration (FCA). The proposed hearing date is Wednesday, Dec. 2. The purpose of the hearing will be to examine the performance of the FCA as the FCS’s regulator.
These increases are powerful evidence of the FCS’s increased emphasis on providing taxpayer-subsidized credit to large corporate borrowers.
Mismanagement results in nearly $50 million in losses for a troubled FCS lender.