Farm Credit System Study Highlights Agriculture's and Rural America's Need for 21st Century Financial Solutions
News Date February 03, 2006
The Farm Credit System issued a report in January to demonstrate how the changing global marketplace and structural change are contributing to a need for American farmers, ranchers and rural entrepreneurs to have reliable access to a broad range of financial services and expertise in order to capitalize on emerging growth opportunities. This is according to a comprehensive, nationwide research study released by the Farm Credit System.
"As this research makes clear, rapid change requires greater flexibility on the part of the institutions that U.S. agriculture and rural America rely on. Yesterday's ways of doing business simply will not work to ensure the continued success of agriculture and America's rural communities," said Wayne Lambertson, a Maryland farmer who serves as chairman of the Farm Credit Council Board of Directors. Part of an ongoing initiative called "Farm Credit HORIZONS," the report identifies multiple key findings about the future of agriculture and rural America. It describes how these findings need to drive policy solutions that will help farmers, rural businesses and rural communities succeed in the emerging marketplace. The project has helped identify how incremental changes to the Farm Credit System can provide agriculture and rural America greater access to additional capital that can be used to expand agriculture's contribution to rural prosperity. The Farm Credit System's Congressionally mandated mission is to make credit available for farmers and ranchers, their cooperatives, rural residences, and to businesses on which farming operations are dependent.
The HORIZONS report contains the following key findings:
* There is tremendous diversity in size, annual revenue, ownership structure and marketing approaches, as well as in the age, ethnicity and gender of the owners and operators of today's farms.
* Farmers are diversifying their business interests both within and outside agriculture. The overwhelming majority of all farmers, but especially small-sized operations, rely on off-farm employment to stay in agriculture.
* Farmers depend on a wide range of businesses that may or may not be owned by farmers, and they may or may not be located in a rural community, but all are essential to the economic viability and quality of life for farmers.
* While the number of farmers, the jobs in agriculture and agriculturally related industries, and the number of counties and communities that rely on agriculture for their economic well-being have all declined, the future of U.S. agriculture remains bright. Future possibilities are expanding, not contracting.
* It is becoming increasingly difficult to define a "rural" community solely by population or traditional qualities.
* Regional collaboration, public-private partnerships and coalitions of investors are key to the future of many rural communities. To create jobs, attract new business and foster an environment for future economic development, agriculture and rural America will need to find new ways to reinvest farm real estate equity.
* As skilled, experienced and innovative business owners, today's rural entrepreneurs, including farmers, ranchers and producers alike, will continue to need access to capital, essential infrastructure, and business support services for that entrepreneurial engine to continue to spur rural economic growth.
* The diverse farms, rural businesses and rural communities of the 21st Century need ongoing access to dependable, flexible and competitive financial products and services to compete and thrive in this global and rapidly changing environment.
Copies of the HORIZONS Final Report may be downloaded from http://www.fchorizons.com along with testimonials from individuals describing agriculture and rural America's needs for reliable, flexible financial products and services meet the growing requirements of rural entrepreneurs and to fuel economic growth in rural communities.
In response to this report, John Evans Jr.,chairman of the Independent Community Bankers of America's (ICBA) Agriculture Rural America Committee and CEO of D.L. Evans Bank, Burley, Idaho, released the following statement regarding the HORIZONS Project: "FCS has completed its so-called Horizons Project, in which FCS representatives have gone to great lengths to justify their desire to expand into new business lines that go well beyond agriculture. This appears to be little more than an effort to crowd out taxpaying commercial banks from many lines of businesses they currently serve well, by leveraging the tax-exempt advantages of the FCS's status as a government-sponsored enterprise (GSE) against the private sector." In addition, the ICBA welcomes efforts by the Farm Credit System to meet with ICBA's leadership and community bankers to discuss a perceived lack of credit the system believes may exist, but ICBA draws the line at any attempt to justify taking over the customer base of community banks by leveraging the FCS's government ties. (Contact: Jennifer Yezak)