Pub. 6 2011-2012 Issue 3

September/October 2011 25 Extraordinary Service for Extraordinary Members. we’re Always CLOSE BY NetWorks is the Electronic Funds Transfer (EFT) service provider that Nebraskans have used and learned to trust like family for over 30 years. Since our offices are right here in Nebraska, you can count on us to provide quick and personalized service for all of your EFT needs. Give us a call and let’s talk about how we can simplify EFT for you. You will talk with a fellow Nebraskan and not some automated system. www.netseft.com Toll Free 800-735-6833 Local 402-434-8202 To contact Bert Ely, e-mail bert@ely-co.com ; fax (703) 836-1403; phone (703) 836-4101; or mail PO Box 320700, Alexandria, Va. 22320. beginning, and small (YBS) farm- ers and ranchers. As steadfast Farm Credit Watch (FCW) readers know, I have long been highly skeptical of the FCS’ performance as a YBS lender. On June 9, the FarmCredit Administration (FCA) released its annual report on the FCS’ YBS “mission performance” in 2010. Continuing its past practice of overstating the FCS’ YBS lending, the FCA engaged in triple-counting by separately tallying loans to young farm- ers (under the age of 36), new farmers (10 years or less farming experience), and small farmers (gross annual farm sales of $250,000 or less). That is, an FCS borrower who is 32, has been farm- ing for eight years, and has gross farm sales of $225,000 gets counted three times in the FCA’s tally of YBS lending. The FCA has the statistical capability to eliminate this triple-counting but has chosen not to, most likely because do- ing so would greatly deflate FCS claims about its YBS lending. Loans and loan commitments clas- sified as YBS lending, as a percentage of total FCS loans and loan commitments (in effect, accepting this triple-count- ing), actually show a slight decline in the FCS’ YBS lending from the end of 2008 to the end of 2010. Over that two-year period, total FCS loans and loan commitments increased 5 percent. While the amount lent to young farm- ers increased 8.2 percent over that two- year period, loans to beginning farmers rose just 3.9 percent and loans to small farmers and ranchers (which includes part-time farmers of all ages) rose only 2.3 percent. The time has come for the FCA to start more accurately reporting its YBS lending by not triple-counting FCS lending to farmers who are young, relatively new to farming, and conse- quently do not yet have annual farm sales greater than $250,000. Report FCS Lending Abuses Bankers are continuing to send FCW reports of FCS lending abuses such as FCS loans for rural estates, weekend getaways, and hunting preserves. E-mail reports of similar lending abuses in your market to green-acres@ely-co.com. Please pro- vide as much detail as possible about any loan that violates the spirit, if not the law, governing FCS lending. Farm Credit Watch Free to ABA Members If your bank belongs to the Ameri- can Bankers Association (ABA), you can enjoy a free e-mail subscription to FCWor you can read it monthly online at www.aba.com . To receive FCW by e-mail or tomanage your subscription, visit ABA E-Mail Bulletins at www. aba.com/members+only/bulletin.htm and check or uncheck the appropri- ate boxes. For other inquiries, please contact Barbara McCoy at the ABA at 1-800-BANKERS. Z