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.

RELATED TERMS
  1. Production Credit Association - ...

    A federal instrumentality created by Congress through the Farm ...
  2. Federal Farm Credit System - FFCS

    In the United States, a network of federally chartered financial ...
  3. Farm Credit System - FCS

    The Farm Credit System is a nationwide network of cooperative ...
  4. Banks For Cooperatives

    Established by the Farm Credit Act of 1933, these regional, privately-owned ...
  5. Farmer Mac - Federal Agricultural ...

    A publicly traded, shareholder-owned corporation that was federally ...
  6. Credit Limit

    The amount of credit that a financial institution extends to ...
Related Articles
  1. Insights

    OPEN

    Agriculture
  2. Small Business

    Small Business Loan Vs Line of Credit: How They Differ

    Understand the differences between a small business loan and a line of credit, and learn some of the most appropriate uses for each form of financing.
  3. Tech

    Three Agriculture Startups Disrupting Monsanto

    Even as technology startups have disrupted other industries, agriculture has remained immune to its effect. But that is about to change.
  4. Personal Finance

    Is Your Credit Score at 850? It Can Be!

    Use these tips to increase your credit score and your ability to get low interest rates on loans.
  5. Personal Finance

    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.
  6. Personal Finance

    How To Establish A Credit History

    Can't get a credit card without a credit history, and can't get a history without a card? Break the Catch-22.
  7. Personal Finance

    6 Ways To Build Credit Without A Credit Card

    It's definitely possible – if a bit more complicated – to build a credit history without traditional credit cards. Just follow these steps.
  8. Personal Finance

    Analyzing a Career in Credit Analysis

    If you're a number-cruncher and responsibility doesn't scare you, this could be the job for you.
  9. Investing

    A Primer For Investing In Agriculture

    In this article, we'll look at the agriculture sector and the different ways investors can approach it.
  10. Personal Finance

    How Your Credit Score Compares to the Average American's

    While only a small percentage of Americans have terrible credit scores, a whopping 30% have poor or bad credit, according to the Consumer Financial Protection Bureau.
RELATED FAQS
  1. What is the point of agricultural subsidies?

    Read about the historical origins of agricultural subsidies, and find out why the government spends hundreds of billions ... Read Answer >>
  2. What is the difference between a loan and a line of credit?

    Learn to differentiate between lines of credit and standard loans, and determine when you are likely to use each method of ... Read Answer >>
  3. When do I need to file an IRS Schedule F form?

    If you are a farmer, your farming business may require you to file a Schedule F with the IRS. Read Answer >>
  4. What's the difference between a credit rating agency and a credit bureau?

    Learn how to differentiate between credit rating agencies and credit bureaus, two industries that distribute valuable risk ... Read Answer >>
  5. Why don't I have a credit score?

    Learn about some of the reasons why you might not have a credit score, and find out how you can build a good credit score ... Read Answer >>
Hot Definitions
  1. Trustee

    A person or firm that holds or administers property or assets for the benefit of a third party. A trustee may be appointed ...
  2. Gross Domestic Product - GDP

    GDP is the monetary value of all the finished goods and services produced within a country's borders in a specific time period, ...
  3. Debt/Equity Ratio

    The D/E ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders’ equity.
  4. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange.
  5. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present value of cash inflows and the present value of cash outflows ...
  6. Return On Equity - ROE

    The amount of net income returned as a percentage of shareholders equity. Return on equity measures a corporation's profitability ...
Trading Center