Pub. 13 2018-2019 Issue 5

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® JUST-ENACTED FARM BILL HAS SIGNIFICANT IMPLICATIONS FOR THE FCS A S FARM CREDIT WATCH (FCW) REPORTED IN NOVEMBER, THE Farm Credit Administration (FCA) will review its YBS [young, beginning, and small farmer] regulations, specifically “to explore ways to improve [FCS] services to YBS farmers and ranchers and to update [FCS] reporting re- quirements.” The just-passed FarmBill most likely has increased the complexity of this review, which could delay implementation of a revised YBS regulation. Section 5416 of the bill directs the General Accountability Office (GAO) to study the availability of agricultural credit to “socially disadvantaged farmers and ranchers.” As I reported in the July FCW, the Senate version of the FarmBill would have expanded the YBS definition to include “socially disadvantaged farmers and ranchers.” The GAO study is to be completed within four months after the Farm Bill be- comes law, or about the end of next April. The FCA probably will hold off revising its YBS regulation until it has fully considered the results of the GAO study, specifically as it may recommend expanding the regulation to encompass “socially disadvantaged farmers and ranchers.” One potentially troubling aspect of this study is that the definition of “agricultural credit providers” includes all entities providing agricultural credit, including the FCS, commercial banks, Farmer Mac, life insurance companies, and “any other individual or entity, as determined by” the GAO. Potentially, this aspect of the study could lead to a recommendation that new obligations be imposed on all ag lenders with regard to lending to “socially disadvantaged farmers and ranchers.” The preceding section of the bill, 5415, directs the GAO to “study the agricultural credit needs of farms, ranches, and related agricultural businesses that are owned or operated by Indian tribes on tribal lands or enrolled members of Indian tribes on Indian allotments” and “determine whether [FCS institutions]