June 10, 2011
On May 25, the Farm Credit Administration (FCA) issued a proposed change to regulations for Farm Credit Systems that would require institutions to include an emphasis on diversity as part of their business plan. The pool of farmers, FCA notes, is becoming not only more racially and ethnically diverse than in the past, but includes young farmers and small farms serving local and regional food systems as well.
Unless FCS institutions can effectively reach these groups of potential borrowers, FCA warns that they risk losing relevance and market share. FCA specifically highlighted farmers producing organic or specialty crops and selling directly to the consumer. Citing figures from the 2007 Census of Agriculture, they note that most farms selling directly to consumers are small operations with less than $50,000 in farm sales.
The proposed rule is an excellent opportunity for family farm and local and regional food advocates to help FCA, as the regulator, prod the FCS lending institutions to do a better job in reaching a growing lending market of farmers who are focused on serving a wide variety of local and regional food distribution channels and marketing outlets. NSAC will be issuing an action alert next week and we encourage members and readers to help distribute the alert far and wide.
The deadline for public comments is July 25, 2011. Comments may be submitted on the FCA website or at the Federal Rulemaking Portal.
FCA is the independent Federal agency responsible for examining and regulating the government-sponsored Farm Credit System. Through its oversight and regulation of the Farm Credit System, FCA helps to ensure a dependable source of credit and related services for agriculture and rural America.
Categories: Beginning and Minority Farmers, Commodity, Crop Insurance & Credit Programs, General Interest