The public has until July 25, 2011 to submit comments on the Farm Credit Administration’s (FCA) proposal to require Farm Credit System lending institutions to emphasize borrower diversity as part of their business plan, including young farmers, small farms serving local and regional food systems, and racial and ethnic diversity.

The proposed rule is an excellent opportunity for family farm and local and regional food advocates to help shape FCA efforts to do a better job in reaching a growing market of farmers who are focused on producing for a wide variety of local and regional food distribution channels and marketing outlets.

Nearly one hundred citizens have already submitted comments on why this rule is important and how it can be implemented most effectively.  Many commenters noted the potential opportunities in local and regional food systems if credit were made available.

In the southeast Michigan area, the demand for local foods far outstrips the supply.   There are trained individuals interested in starting small and mid size farms that need financial assistance and business supports that will allow them to grow for local and regional markets.  -Sharon S., Michigan

As a producer of grass finished beef and seed stock for that industry and a former credit officer and appraiser for the Farm Credit System, I am uniquely attuned to the potential impact that FCS can have on our food supply.  Smaller, less commodity driven farmers and ranchers are vital to the “quality and quantity” of our nations food supply.  -Bill R., Arizona

Maine is on the cusp of great local and regional food growing, processing, and distributing.  Small farmers are the lifeforce of this.  -Erica R., Maine

Commenters also asked that the rule for FCS marketing plans include:

• A requirement that FCS institutions create a baseline analysis of current borrowers who meet the farm bill definition of local and regional food producers by number of borrowers, by loan volume, and other key characteristics.
• A minimum investment goal for local and regional food producers of at least 10% of each institution’s capital within 5 years.
• A plan for conducting outreach to local and regional food producers and a commitment to adding local and regional food producers to the FCS board.
• A requirement that periodic progress reports be made public..
• A plan for providing staff development training to FCS personnel across the full spectrum of lending, accounting, farm transfer and business planning services appropriate for serving local and regional food producers.
• A plan for developing lending and business support products with terms and benefits appropriate for local and regional food producers.
• An inventory of strengths and weaknesses of the local and regional food infrastructure within the bank’s territory and a plan for leveraging the public and private capital necessary to address those weaknesses.

The deadline for public comments is July 25, 2011. For instructions on how to submit a comment see our Farm Credit Administration Action Alert.  

FCA is the independent Federal agency responsible for examining and regulating the government-sponsored Farm Credit System.  FCS supplies nearly 40% of all U.S. farm financing and has the capacity to bring millions of dollars of capital and business services to local food producers, and perhaps also to leverage other sources of capital for the task of rebuilding our local and regional food system infrastructure.

This is an important opportunity to help shape future FCS services to small and mid-sized farmers and ranchers producing for the local and regional market.