Academic journal article ABA Banking Journal

ABA Ag Effort Keeps Plowing Ahead for Banks

Academic journal article ABA Banking Journal

ABA Ag Effort Keeps Plowing Ahead for Banks

Article excerpt

The steady improvement in farm real estate values since the farm recession of the mid-1980s has given ag banks something to be happy about for a change. Loan portfolios are healthier, as are earnings.

But ag lenders shouldn't assume-and likely don't-that good times, solid commodity prices, and rising land values will be a permanent feature of the 1990s.

Time to weed. In fact, ABA's president-elect, Alan R. Tubbs, told attendees at the recent ABA National Agricultural Bankers Conference that now is a good time for ag bankers to get their balance sheets in order.

It's an exercise that we must all be engaged in," said Tubbs, "if we are to weather any possible downturn in agriculture. The lesson of the 1980s in farm country is that good times don't last, but good bankers do." Tubbs, president of Maquoketa State Bank, Maquoketa, Iowa, is a former chairman of ABA's Agricultural Bankers Division.

Massive ag effort. Ag banks make up about half of the membership of ABA. Justifiably ABA puts much time and resources to work on ag issues.

For example, ABA was a major contributor to the establishment of the secondary market entity Farmer Mac" (officially the Federal Agricultural Mortgage Corp.). It took a ten-year effort by bankers and ABA staff to gain access to greater liquidity.

ABA helped light a fire under the Office of the Comptroller of the Currency when that agency deliberated on Farmer Mac for more than a year. Now that OCC has made its decision and mortgage pools are being readied for market. ag banks can finally focus on how best to use this new source of liquidity

An ABA grant led to research on the Farm Credit System by the consulting firm of Ely & Co. …

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