Agricultural Credit


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.

BREAKING DOWN '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.

  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. Bill Of Exchange

    A non-interest-bearing written order used primarily in international ...
  4. Federal Farm Credit System - FFCS

    In the United States, a network of federally chartered financial ...
  5. Banker's Acceptance - BA

    A short-term debt instrument issued by a firm that is guaranteed ...
  6. Operating Expense

    A category of expenditure that a business incurs as a result ...
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