Pub. 13 2018-2019 Issue 2

WWW.NEBANKERS.ORG 22 Shedding Light on the Farm Credit System, America’s Least Known GSE © 2018 Bert Ely BERT ELY’S FARM CREDIT WATCH® THE FARM CREDIT WATCH AT 20 FCA PostsMisleading Video on ItsWebsite In connection with a redesign of its website, the FarmCredit Administration (FCA) has posted a short (1 minute, 35 second) video, which presents a misleading picture of the role the Farm Credit System (FCS) plays in providing credit to agriculture and rural America. The video clearly conveys the idea that the FCS is the dominant, if not exclusive, provider of credit to agriculture and rural America, yet that definitely is not the case. According to unbiased data from the USDA, in 2016 commercial banks actually provided slightly more credit to farmers and ranchers than did the FCS, despite the significant tax and funding cost advantages the FCS has over banks, especially with regard to financing agricultural real estate. In the non-real estate com- ponent of farm borrowings, where the FCS has less of a tax and funding cost advantage, banks provided three dollars of credit to farmers and ranchers for every two dollars provided by the FCS. When the FCA updates its video, as surely it should, it needs to present amuchmore balanced perspective on the significant role that banks, and other private-sector lenders play in providing credit to agriculture and rural America.