Farm Credit System - FCS

The Farm Credit System (FCS) gives out loans to more than farms. It also gives out loans to rural homeowners, lumberjacks…err, timber harvesters...agricultural businesses, and other rural-related people and businesses. The cool thing about FCS is that it’s owned by borrowers, and spans across the U.S., making it relatively accessible.

It was established in the early 1900s by the U.S. government to make sure rural folk had access to reliable, competitive interest rates and insurance options. It’s a hierarchical system with three Farm Credit Banks on top, which make loans to 50 Agricultural Credit Associations and one Federal Land Credit Association. The Agricultural Credit Associations and the lonesome Federal Land Credit Association then make all kinds of loans to farmers, ranchers, harvesters, and rural folk in general: short, medium, and long-term loans.

The FCS was really tested in the 80s during a major farm crisis. With so many farmers unable to pay their debts, a heavy burden was placed on the FCS, and investors began to lose faith in it, causing investors to bounce. Because of this, the government has made some edits to the FCS to keep it strong. Although…the FCS has also faced its fair share of criticism. Since it comes with tax benefits and can be easier to get than through traditional banking channels, there are cases where some argue it’s been abused (looking at you, Verizon and Cracker Barrel). But alas, that’s how life goes in the big city. Or turnip farm.