“We want to know if you think we should change the eligibility criteria for farmers; whether we should repeal, retain or amend the score of financing requirements; and how we should regulate farm credit system lending for farmers’ other credit needs,” says Mark Johansen, policy analyst for the Farm Credit Administration in McLean, Va.
Comments on the issue are being solicited as a result of a petition filed with the Farm Credit Administration claiming the agency’s current rules restrict the farm credit system’s ability to serve creditworthy and eligible farmers, including those who have significant off-farm income, and young, beginning, and small farmers.
The petition also asks the Farm Credit Administration to repeal its rule limiting the amount of credit that can be extended to eligible farmers.
Bert Ely of Alexandria, Va., who publishes Farm Credit Watch, a farm credit system watchdog publication, says, “Many bankers understandably are skeptical about the Farm Credit Administration’s willingness to crack down on farm credit system lending abuses. To some extent, this unwillingness stems from the fuzziness of the FCA regulations now under review.”
Because of this, he encouraged bankers and producers to send the Farm Credit Administration suggestions on how to improve these regulations. That way, he says. “The Farm Credit Administration will be better equipped legally to enforce the spirit as well as the letter of the Farm Credit Act, which governs both the farm credit system and the Farm Credit Administration.”
The Farm Credit Administration currently defines a farmer or rancher as a person who either owns agricultural land, or is engaging in the production of agricultural products.
According to current Administration regulations, it’s the objective of farm credit system banks to provide full credit to full-time, creditworthy farmers; conservative credit to less than full-time farmers for agricultural enterprises; and more restricted credit for other credit requirements needed to ensure a sound credit package or accommodate a borrower’s needs, as long as the end product is primarily an agricultural loan.
Comments on the issue, directed to the Farm Credit Agency, should be addressed to Robert E. Donnelly, Acting Director, Regulation and Policy Division, Office of Policy Analysis, Farm Credit Administration, 1501 Farm Credit Drive, McLean, Virginia 22102-5090. You can also e-mail your comments to [email protected], or fax them to 703-734-5784. The deadline to respond the Farm Credit Agency’s inquiry is July 31.
“When commenting, state in the subject line of your email or in a prominent place in your letter or fax that you are writing to comment on the Advance Notice of Proposed Rulemaking on the Eligibility and Scope of Financing provided by FCS lenders,” Ely said.