Agricultural Credit

AAA

DEFINITION of 'Agricultural Credit'

Any of several credit vehicles used to finance agricultural transactions, including loans, notes, bills of exchange and banker's acceptances. These types of financing are adapted to the specific financial needs of farmers, which are determined by planting, harvesting and marketing cycles.

Short-term credit finances operating expenses, intermediate-term credit is used for farm machinery, and long-term credit is used for real-estate financing.

INVESTOPEDIA EXPLAINS 'Agricultural Credit'

In the U.S., the Federal Farm Credit System (FFCS) plays a key role in agricultural credit. Originated in 1916, the FFCS comprises approximately 100 institutions with over $180 billion in assets and provides an estimated 35% of the real-estate and non-real-estate borrowing needs of U.S. farmers.

RELATED TERMS
  1. Production Credit Association - ...

    A federal instrumentality created by Congress through the Farm ...
  2. Banks For Cooperatives

    Established by the Farm Credit Act of 1933, these regional, privately-owned ...
  3. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  4. Bill Of Exchange

    A non-interest-bearing written order used primarily in international ...
  5. Operating Expense

    A category of expenditure that a business incurs as a result ...
  6. Federal Farm Credit System - FFCS

    In the United States, a network of federally chartered financial ...
Related Articles
  1. 5 Investment Risks Created By Global ...
    Home & Auto

    5 Investment Risks Created By Global ...

  2. Harvesting Crop Production Reports
    Options & Futures

    Harvesting Crop Production Reports

  3. Grow Your Finances In The Grain Markets
    Active Trading

    Grow Your Finances In The Grain Markets

  4. Learn To Corral The Meat Markets
    Active Trading

    Learn To Corral The Meat Markets

Hot Definitions
  1. Leading Indicator

    A measurable economic factor that changes before the economy starts to follow a particular pattern or trend. Leading indicators ...
  2. Wage-Price Spiral

    A macroeconomic theory to explain the cause-and-effect relationship between rising wages and rising prices, or inflation. ...
  3. Accelerated Depreciation

    Any method of depreciation used for accounting or income tax purposes that allows greater deductions in the earlier years ...
  4. Call Risk

    The risk, faced by a holder of a callable bond, that a bond issuer will take advantage of the callable bond feature and redeem ...
  5. Parity Price

    When the price of an asset is directly linked to another price. Examples of parity price are: 1. Convertibles - the price ...
  6. Earnings Multiplier

    An adjustment made to a company's P/E ratio that takes into account current interest rates. The earnings multiplier is used ...
Trading Center