What is 'Farm Credit System - FCS'

The Farm Credit System (FCS) is a nationwide network of cooperative banks and associations that provide credit to farmers, agricultural concerns and related businesses throughout the United States.

BREAKING DOWN 'Farm Credit System - FCS'

The Farm Credit System (FCS) supports a wide variety of individuals and entities, including farmers and agricultural companies. FCS assists people and organizations of all types and sizes, ranging from small family farms to corporations with global operations.

The FCS consists of 73 independent financial institutions, each of which is managed by a board of directors chosen by the customer(s) supported by that institution. The FCS makes loans for a variety of purposes, including agricultural processing and marketing activities, rural housing initiatives, farm-related businesses, rural utilities and foreign and domestic companies involved in agricultural trade. Loan proceeds are used for the purchase and maintenance of products and supplies such as grains like corn and wheat, cattle, food products, farm supplies, energy and water operations, and for enacting marketing programs. Some loans support property purchases made by rural homeowners.

The FCS provides access to critically needed credit in rural areas where national and regional banks typically do not have a presence. That in turn helps support rural communities and keeps them healthy and thriving. The organization’s mission today also focuses on ensuring that American agriculture remains competitive in global markets.

FCS services and resources include financial products such as credit life insurance, crop insurance, accounting tools and cash management services. The organization also provides access to leasing programs that allow customers to purchase and finance vehicles, farm equipment and other supplies.  

History of the Farm Credit System

The organization’s roots trace back more than 100 years. It originated when Congress created the FCS in 1916 through legislation establishing the Federal Land Bank System. The group issued its first loan less than a year later. The system expanded during the Great Depression, and was credited with helping to save many American farms during that period when farmers, like many other Americans, were struggling.

The Farm Credit Act of 1953 established the FCA as one of the agencies that fall under the executive branch, setting it on a course towards independence. The federal government originally funded the FCS to ensure American agriculture had a dependable source of credit. It is now self-funding and owned by its member-borrowers. The organization’s size and scope allow member-borrowers to have access to credit sources and attractive borrowing terms that might not otherwise be available to them, especially in the case of small farms or those with limited resources.

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