Production Credit Association - PCA

AAA

DEFINITION of 'Production Credit Association - PCA'

A federal instrumentality created by Congress through the Farm Credit Act of 1933 to provide short- and intermediate-term credit to farmers, ranchers and rural residents. The credit was extended so the recipients could purchase housing, perform marketing activities, purchase farm equipment and livestock and operate farm-related businesses. At the time, credit was either not available or was available only at prohibitively high interest rates because of the Great Depression. Farmland and commodities weren't worth as much, and banks already had lots of agricultural loans on their books.

Production credit associations can make or guarantee loans whose terms do not exceed seven, 10 or 15 years, depending on the funding bank's policies. The loan must be amortized over 15 or fewer years, and any refinancing may not extend the loan term further than 15 years from the original loan date.

INVESTOPEDIA EXPLAINS 'Production Credit Association - PCA'

The Farm Credit System, a government-sponsored enterprise established in 1916, provides financing and financial services related to agriculture and includes a number of credit organizations. In addition to production credit associations, these include agricultural credit associations, agricultural credit banks, banks for cooperatives, farm credit banks, federal intermediate credit banks, federal land bank associations and federal land credit associations. PCAs get their funding from farm credit banks and own their loan assets. The Farm Credit System raises money by selling debt securities to investors in the U.S. and abroad.

RELATED TERMS
  1. Amortization

    1. The paying off of debt in regular installments over a period ...
  2. Farm Credit System - FCS

    The Farm Credit System is a nationwide network of cooperative ...
  3. Rural Housing Service - RHS

    An administrative division within the U.S. Department of Agriculture ...
  4. Commodity

    1. A basic good used in commerce that is interchangeable with ...
  5. Credit

    1. A contractual agreement in which a borrower receives something ...
  6. Agricultural Credit

    Any of several credit vehicles used to finance agricultural transactions, ...
RELATED FAQS
  1. How does transfer pricing help business?

    Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >>
  2. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
  3. How important are contingent liabilities in an audit?

    Contingent liabilities, when present, are very important audit items because they normally represent risks that are easily ... Read Full Answer >>
  4. How does quantifying fixed overhead volume variance show whether a company is profitable ...

    Fixed overhead volume cannot definitively prove a company is profitable, but it can be used to provide an excellent indication ... Read Full Answer >>
  5. What does inventory turnover tell an investor about a company?

    The inventory turnover ratio determines the number of times a company's inventory is sold and replaced over a certain period. ... Read Full Answer >>
  6. What is a deferred tax liability?

    A deferred tax liability is an account that is listed on a company's balance sheet and occurs when its taxable income is ... Read Full Answer >>
Related Articles
  1. Credit & Loans

    5 Keys To Unlocking A Better Credit Score

    Follow these tips and techniques to rebuild a ruined credit rating.
  2. Credit & Loans

    The Importance Of Your Credit Rating

    A great starting point for learning what a credit score is, how it is calculated and why it is so important.
  3. Credit & Loans

    Understanding The Mortgage Payment Structure

    We explain the calculation and payment process as well as the amortization schedule of home loans.
  4. Options & Futures

    Different Needs, Different Loans

    Find out what options are available when it comes to borrowing money.
  5. Economics

    What are Noncurrent Assets?

    Noncurrent assets are property that a company owns that will last for more than one year.
  6. Investing Basics

    How Much Do CPAs Make?

    If you're considering becoming a CPA, here's what you might expect to earn.
  7. Economics

    Explaining Activity-Based Costing

    Activity-based costing (ABC) is a managerial accounting method that assigns certain indirect costs to the products incurring the bulk of those costs.
  8. Economics

    What is a Contra Account?

    A contra account is an offset that reduces the value of a related account.
  9. Investing News

    Technology: Increasing Indoor Farming's Efficiency

    Indoor farming has gone high-tech. An increasing number of investors are now sitting up and taking notice.
  10. Mutual Funds & ETFs

    Are These 3 Agricultural ETFs, ETNs a Good Bet?

    Three top tier agriculture ETFs and ETNs to consider when the time is right.

You May Also Like

Hot Definitions
  1. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  4. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
  5. Terminal Value - TV

    The value of a bond at maturity, or of an asset at a specified, future valuation date, taking into account factors such as ...
  6. Rule Of 70

    A way to estimate the number of years it takes for a certain variable to double. The rule of 70 states that in order to estimate ...
Trading Center