Drought Won’t Impact Farm Credit System

Chief executives of the nation’s four Farm Credit banks issued a joint statement pledging to stand by farmers, ranchers, cooperatives and other agricultural borrowers grappling with severe drought conditions across the country. The four banks—AgFirst, AgriBank, CoBank and Farm Credit Bank of Texas—act as the funding banks for 82 borrower-owned Farm Credit associations operating in all 50 states. Together, the banks and associations of the Farm Credit System function as the largest source of credit for American agriculture, accounting for an estimated 40% of all ag lending nationwide.

“The Farm Credit System remains well positioned to meet the borrowing needs of rural America, notwithstanding the difficult conditions brought on by the drought of 2012,” the bank CEOs said. The four chief executives are Tim Amerson of AgFirst; Bill York of AgriBank; Bob Engel of CoBank, and Larry Doyle of Farm Credit Bank of Texas.

The hardest-hit areas of the Grain Belt are experiencing sharply lower yields and acreage abandonment, while livestock, dairy and other sectors will be negatively impacted by recent increases in prices for corn, soybeans, hay and other feedstuffs. Nonetheless, the CEOs said, the Farm Credit System is working collaboratively with borrowers on a case-by-case basis in these industries to ensure continued access to loans and other financial services, including those experiencing distress as a result of the drought. ◆