FARM
CREDIT ADMINISTRATION PROPOSAL
TALKING POINTS
NAR Contact: Russell Riggs, 202-383-1259; George Griffin, 202-383-1102
Background
The Farm Credit System (FCS) is a cooperatively-owned system of financial institutions
that make real estate, housing and farm operating loans, plus offer farm, crop
and family insurance, primarily in rural areas. The FCS is a significant lender
of agricultural real estate loans in the U.S., and provides approximately 1/3
of the total operating credit used by U.S. farmers and ranchers.
The Farm Credit Administration (FCA) oversees the FCS and regulates the services offered by FCS financial institutions. The FCA may authorize these services without approval by Congress.
FCA Proposal
The FCA has proposed to authorize a Farm Credit System banking institution to
offer farm management and agricultural trust services. Under this proposal,
a FCS institution would be authorized to provide management of agricultural
trust services for property owners. NAR opposed a similar proposal offered by
the FCA in 1995.
Farm management includes developing a comprehensive farm operating plan, securing operators and negotiating leases, providing property reporting, analyzing government programs and handling commodity sales.
Agricultural trust services include creating a trust and managing the assets of the trust.
Impact on Realtors
This FCA proposal would have serious impacts on members who specialize in farm,
ranch and residential sales and property management services by providing unfair
competitive advantages to FCS institutions. This proposal also exposes FCS institutions
that would engage in these activities to financial risks and may undermine the
entire agricultural credit and loan system. This proposal would also provide
a precedent for having financial institutions engage in real estate activities.
Current Status
The deadline for comment on this proposal is December 22, 2003. NAR will develop
a comment letter, meet with FCA officials, activate NAR/RLI grassroots network,
discuss issue and provide material to GADs in targeted states for them to circulate
and to generate letters to the FCA, contact commodity groups (cotton growers,
cattlemen, corn, wheat, sugar, peanut) to assess their position, and meet with
appropriate congressional staff to get this issue on their radar.
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