Page 65 - July-August 2018 GSE Report Flip Book

FARM CREDIT SYSTEM / FARMER MAC JJUALN. U- ARUYG. 22001188
FARM CREDIT SYSTEM / FARMER MAC A few interesting Farm Credit Administration provisions in the Farm Bill
In Farm Credit Watch, Bert Ely wrote:
...Senate Farm Bill would expand definition of YBS borrowers. A provision in
the Senate version of the Farm Bill, which was passed on June 27, would expand the definition of young, beginning, and small (YBS) farmers and ranchers to include “socially disadvantaged farmers and ranchers.” Under existing law, such farmers and ranchers are members of a group “whose members have been subjected to racial or ethnic prejudice because of their identity as members of a group without regard to their individual qualities.” Whether the House will accept this provision is unknown. A question to consider: Why is this provision even needed since FCS lenders should not discriminate against prospective borrowers because of their race or ethnicity?
If this provision is included in the final version of the next Farm Bill, the FCA will have
to draft a regulation incorporating the collection of data on FCS lending to socially disadvantaged farmers and ranchers into the existing procedures that quantify FCS lending to YBS farmers. As I have explained in previous FCWs the YBS lending data the FCA now publishes is a mess; adding in data on FCS lending too socially disadvantaged farmers and ranchers would make this data even more misleading.
Presently, a loan to a young (age 35 years or younger), beginning (engaged in farming 10 or fewer years), and/or small (annual gross agricultural or aquatic sales less than $250,000) gets counted three times in the YBS data — once as a young, once as a beginning,
and again as a small farmer. If a YBS farmer or rancher also was classified as socially disadvantaged, then a loan to such a farmer would have to be counted four times. If that farmer had three FCS loans, then the loans to that farmer would be counted twelve times
in the YBS data, greatly exaggerating FCS lending to YBS and socially disadvantaged farmers and ranchers. The ABA has long opposed this double and triple-counting because doing so exaggerates the extent of the FCS’s YBS lending. In other reports, the FCS has demonstrated that it can aggregate all loans to a farmer or rancher so that it can show the total amount of credit the FCS has provided to a particular borrower. This means the FCA, if it was so inclined or was directed by the ag committees, could publish data on lending to designated types of famers without exaggerating that data by double, triple, or quadruple counting individual loans to a particular farmer.
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