In 1916, President Woodrow Wilson signed legislation that led to the creation of the Farm Credit System (FCS) and reliable financing for generations of farmers and ranchers. Over the last century, this national network of taxpayer-supported lending associations has facilitated consolidation of America’s food and farm sector.
As the first “government-sponsored enterprise,” FCS was designed to use the strength of the federal balance sheet to ensure the availability of large pools of private capital to help grow the U.S. agricultural economy. Today, FCS is very large ($229 billion in assets in 2011) and very profitable ($4 billion in earnings)—including $600 million in federal tax exemptions for real estate lending.
However, Congress needs to become better attuned to market forces beginning to decentralize America’s food and farming systems. New agricultural markets are forming in response to consumers wanting to know how food is produced, where and by whom. Yet, the 2012 Farm Bill is unlikely to clarify FCS’ responsibility to be a catalyst in this process. Read more