Farm Credit System

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The Farm Credit System (or Farm Credit) is a federally chartered network of borrower-owned lending institutions composed of cooperatively owned banks, associations and related service organizations in the United States. The System was established by Acts of Congress to meet the credit needs of American agriculture and is subject to the provisions of the Farm Credit Act of 1971, as amended. The most recent significant amendment to the Farm Credit Act was the Agricultural Credit Act of 1987.

As required by the Farm Credit Act, the System specializes in providing financing and related services to qualified borrowers in the rural sector and to certain related entities. Through a nationwide network of locally owned cooperatives, the System makes credit available in all 50 states and the Commonwealth of Puerto Rico, which allows for both geographic and agricultural sector diversification.

The nation is currently served by four Farm Credit Banks, each of which has specific lending authorities within its chartered territory, and one Agricultural Credit Bank which has nationwide lending authorities. Each Farm Credit Bank and the Agricultural Credit Bank provides funding for Agricultural Credit Associations (ACAs) and/or Federal Land Credit Associations (FLCAs), which are collectively referred to as "Associations". Although the System banks and associations are not commonly owned or controlled, they are financially and operationally interdependent. The financial interdependence of the banks is a result of the statutory joint and several liability of banks for all Systemwide debt. The interdependence of the banks and associations results, in part, from the banks serving as the intermediary between the financial markets and the retail lending activities of their affiliated associations.

The banks are the primary source of funding and have some oversight responsibilities related to certain activities of their affiliated associations. Banks raise funds principally through the sale of consolidated Systemwide bonds and notes to the public, through the Federal Farm Credit Banks Funding Corporation. Banks and associations are not authorized to accept deposits and cannot borrow from other financial institutions without the approval of their affiliated bank. As a result, loans made by the associations to agricultural borrowers are substantially funded by the issuances of Systemwide debt securities by the banks. The repayment of Systemwide debt securities is therefore dependent upon the ability of System borrowers to repay their loans.

The Farm Credit Administration (FCA) is delegated authority by Congress to regulate System institutions. The FCA examines the activities of System institutions and certain actions by these entities are subject to the FCA's prior approval.

Borrowers of the System, who owe about $86 billion and number over 500,000, include: farmers, ranchers, producers and harvesters of aquatic products, rural homeowners, certain farm-related businesses, agricultural and aquatic cooperatives, and rural utilities.

[edit] Farm Credit Banks

CoBank - Nationwide Agricultural Credit Bank serving Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island and Vermont. International banking services are provided through its office in Denver.
AgFirst, Farm Credit Bank - Alabama, Delaware, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, Ohio, North Carolina, Pennsylvania, Puerto Rico, South Carolina, Tennessee, Virginia, West Virginia
AgriBank, Farm Credit Bank - Arkansas, Illinois, Iowa, Indiana, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, Tennessee, Wisconsin and Wyoming.
U.S. AgBank, Farm Credit Bank - Arizona, California, Colorado, Hawaii, eastern Idaho, Kansas, Nevada, Oklahoma, New Mexico and Utah.
Farm Credit Bank of Texas - short-term financing to New Mexico, Northwest Louisiana and Texas. Long-term financing to Alabama, Louisiana, Mississippi and Texas