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FARM CREDIT SYSTEM / FARMER MAC JJAN.U- AFERBY. 22001188
It appears that Tonsager is suggesting that FCS associations engage in loan restructuring without calling it that, which would have the effect of underreporting loan-quality issues within the FCS. Given that the USDA has forecast another decline in farm income in 2018, to a level less than half the record income farmers earned in 2013, “there’s a lot of stress and a lot of duress on the farms today,” as Agriculture Secretary Sonny Purdue stated during a recent hearing of the House Agriculture Committee. Has the FCS begun to mask the effect of that stress and distress on its borrowers by encouraging farmers to defer repayment of loan principal? In recent testimony to the House and Senate Agriculture Appropriations Subcommittees, Tonsager noted that four FCS associations “were under supervisory actions,” which suggests that borrower distress is beginning to surface in FCS associations. Encouraging the deferral of principal repayments could unwisely delay the FCA’s recognition and acknowledgement of additional credit-quality problems within the FCS. (Farm Credit Watch, Bert Ely, February 2018)
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