Page 62 - May-June 2018 GSE Report Flip Book

FARM CREDIT SYSTEM / FARMER MAC MAJAYN-UAJRUYNE20210818
FARM CREDIT SYSTEM / FARMER MAC
So far, the House and Senate Farm Bills have minor impact on FCS
“So far, the 2018 House and Senate Farm Bills now pending in Congress would have a minor impact on the FCS, which is good news for bankers,” wrote Bert Ely in Farm Credit Watch.
“On June 21, the House passed its version of the next Farm Bill (H.R. 2) while on June 13, the Senate Agriculture Committee sent to the Senate floor its version of the Farm Bill (S. 3042). The full Senate will take up the Farm Bill before the end of June, with passage of the bill likely, after numerous floor amendments are considered. Differences between the two bills will then have to be resolved in a conference committee, which is expected to begin work in July. While there is a reasonable chance that Congress will enact a new Farm Bill this year, if it does not, then Congress almost certainly will extend the current Farm Bill, passed in 2014, for another year. (Farm Credit Watch, Bert Ely, June 2018)
Farm Credit System reduces lending to smaller borrowers even as System grows
On Farm Credit Watch, Bert Ely wrote:
Despite the FCS’s supposed emphasis on lending to young, beginning, and small (YBS) farmers and ranchers, data in the FCS’s annual information statement for 2017 documents the declining importance of small borrowers to the FCS over the last several years. Although total FCS lending from year-end 2015 to year-end 2017 increased $22.9 billion,
or 9.7 percent, the total amount lent to those who borrowed less than $250,000 was essentially flat, rising to $32.93 billion at year-end 2016 from $32.64 billion at the prior year- end (13.8 percent of total FCS lending) and then dropping to $32.85 billion at the end of 2017, just 12.7 percent of total FCS lending. The FCS had 423,591 borrowers in this loan- size category at year-end 2017. However, a substantial portion of the $208 million increase in borrowings under $250,000 over that two-year period may have been accounted for
by the $144 million increase in FCS rural home loans as most of those loans should have been under $250,000.
FCS lending in the next two borrower-size categories — $250,000 to $500,000 and $500,000 to $1 million — showed a similar flatness in outstanding loans. Total loans in the smaller of these two categories grew just $614 million, or 2.9 percent, over the two-year period, while total loans in the larger category grew $753 million, or 3.1 percent. Some of
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