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 Overview |
The Farm Credit System is a nationwide network of borrower-owned lending institutions and affiliated service entities that lend to agricultural and rural America. The System is the oldest Government-sponsored enterprise (GSE) created when Congress established authority for certain predecessor entities in 1916. For more than ninety years, the mission of the System has been to provide sound and dependable credit for agricultural producers, cooperatives, and certain farm related businesses.
This mission is carried out by the approximately 93 financial institutions in the System. These institutions provide a steady and continuous stream of capital for the agricultural sector in all 50 states and Puerto Rico. Today, approximately 39 percent of the real estate and non-real estate credit needs of U.S. agriculture are met by System institutions (year-end 2008, source: USDA Economic Research Service).
Unlike commercial banks, System Banks and Associations are not legally authorized to take deposits. Instead, funds for loans are obtained through the issuance of Farm Credit Debt Securities on a worldwide basis in the domestic and global capital markets. The proceeds are provided to or used for the benefit of domestic agricultural producers and cooperatives through the various System entities. The System touches everyone's daily life by financing operations that provide America with high quality agricultural products and services.
As of year-end 2009, the System had $215 billion in assets and for the year ended December 31, 2009 net income of $2.85 billion. Additionally, strong management of resources, prudent lending practices and sensible funding patterns have led to a strong capital position for the System. At year-end 2009, System capital as a percentage of total assets was 13.9%.
System institutions are federally chartered under the
Farm Credit Act and are subject to supervision, examination
and regulation by a federal agency, the Farm Credit Administration. The Farm Credit Debt Securities are the
joint and several obligations of the System Banks. In
the late 1980s, an additional measure of protection
was added to the System in the form of the Farm Credit
System Insurance Corporation, an independent U.S. Government-controlled
corporation, that insures, to the extent that funds
are available, the timely payment of principal of and
interest on the Farm Credit Debt Securities. As of year-end 2009,
the Farm
Credit Insurance Fund had $3.3 billion
in assets.
The Federal Farm Credit Banks
Funding
Corporation, as the fiscal agent for the System
Banks, issues the Farm Credit Debt Securities in various forms, including
Discount Notes,
Designated Bonds,
Bonds
, and
Master Notes.
The variety of structures and maturities of Farm Credit Debt
Securities offered allows the System Banks to better
manage risk while providing more investment alternatives
to investors.
Take a Tour of the Farm Credit System:
Continue on to Banks and Associations...
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