Academic journal article ABA Banking Journal

Farm Credit System: Lifestyle Lender to the Weekend Farmer

Academic journal article ABA Banking Journal

Farm Credit System: Lifestyle Lender to the Weekend Farmer

Article excerpt

The anesthesiologist in surgical scrubs shown in the advertisement below perched atop an all-terrain vehicle with a hunting rifle cradled in his arms is Dr. Al Wallace. The ad has him saying: "It's knowing I have a place to retreat to at the end of a long day or an even longer week."

In another part of the ad (not shown), Dr. Steve Imbeau sits on the tailgate of his SUV and says, "It's a place I can enjoy atone or share my piece of paradise with family and friends."

What's not to like? Plenty, if you're an ag banker.

The ads promote a recreational property loan program offered by Pee Dee Farm Credit, part of the Farm Credit System (FCS)--the government sponsored and subsidized institution.

Wallace and Imbeau are two "lifestyle farmers," in the words of consultant Bert Ely, who recently completed a major critique of the Farm Credit System for ABA. Their use of FCS credit for such nonfarming purposes is a symptom of a larger problem. The study, released at ABA's National Agricultural Bankers Conference last November, maintains that the system has outlived its original mandate and, consequently, is squandering a federal subsidy that could be better applied.

"The taxpayer-provided farm finance subsidy delivered through the Farm Credit System increasingly flows to larger, wealthier farming operations and to lifestyle farmers--the 'wealthy weekenders'," writes Ely in The Farm Credit System: Reckless Past, Doubtful Future. …

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