Who Finances

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Who Finances Americas Family Farmers?
A Review of the Recent
USDA Agriculture Economics and Land Ownership
Survey
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The 1999 Agriculture Economics and Land
Ownership Survey
Released by the USDA in August of 2001
Provides the Most Current Data About U.S. Farmers
and Ranchers
The Questionnaires Were Completed by Thousands of
Farmers and Ranchers and Compiled by the USDA
Provides Insight into Where Farm Operators and
Owners Get Their Financing
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The Farm Credit System
Congress created the Farm Credit System (FCS)
in 1916 as Americas first government-sponsored
enterprise (GSE). The FCS competes with the
private sector by lending directly to farmers,
ranchers, rural businesses and rural homeowners.
GSE status allows the FCS to borrow money from
the public at rates comparable to the federal
government. Its earnings are largely tax exempt.
While the federal government does not explicitly
guarantee bonds that the FCS issues, the
government did provide a 4 billion line of
credit to stave off the insolvency of the FCS in
1987. Today, the Farm Credit System has over 98
billion in assets and made over 1.4 billion in
net income in 2000.
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4
Banks in Rural America
Banks are privately owned businesses which are
capitalized by investors whose money is at risk.
Banks fund their operations primarily by
accepting deposits and making loans to farmers,
ranchers, rural businesses, and individuals.
Banks are the only financial institutions subject
to the federal Community Reinvestment Act. 
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5
Banks Have Steadily Increased Their Loans to
Farmers
Marketshare
Source 2001 USDA Agriculture Income and Finance
Report
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6
The Average American Farm With Debt Has 615 Acres
The Average Farm Acreage of Bank Customers
600 FCS Customers 935
Source USDA Agriculture Economics and Land
Ownership Survey
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The Average Family Farmer is a Bank Customer
The Average Market Value of Farm Products Sold
By All Farms With Debt 168,000
The Average Market Value of Farm Products Sold
By Bank Customers 156,000
The Average Market Value of Farm Products Sold
By FCS Customers 311,000
Source USDA Agriculture Economics and Land
Ownership Survey
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8
Banks Serve Three-Quarters of the Youngest Farm
Operators
Defined as operators under the age of 35
Source USDA Agriculture Economics and Land
Ownership Survey
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9
The Farm Credit System is Not Focused on
Beginning Farmers
Breakdown of FCS Loan Portfolio by Farmer Age
Source USDA Agriculture Economics and Land
Ownership Survey
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10
Banks Lend to More Family Farmers
Number of Family Farm Customers
Sole proprietorships, partnerships and family
held farms
Source USDA Agriculture Economics and Land
Ownership Survey
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11
A Quarter of Farm Credit System Loans Are To
Large Farms
Farms with 250,000 or more in sales
Source USDA Agriculture Economics and Land
Ownership Survey
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Almost a Quarter of Farm Credit System Customers
Operate Americas Largest Farms
Source USDA Agriculture Economics and Land
Ownership Survey
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Who Serves More Mega-Farms?
Percentage of Customers
Farms with 500,000 or more in sales
Source USDA Agriculture Economics and Land
Ownership Survey
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14
Farm Operators Banks Finance More Minorities
and Women Than Anyone
A farm operator is defined as a person who
operates a farm or ranch, either doing the work
or making day-to-day decisions about such items
as planting, harvesting, feeding, and marketing.
See Appendix A of the AELOS
Source USDA Agriculture Economics and Land
Ownership Survey
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Farm Owners Banks Finance More Minorities and
Women Than Anyone
A farm owner is defined as an individual,
partnership, corporation, or other entity who
owns land used for agricultural purposes. See
Appendix A of the AELOS
Source USDA Agriculture Economics and Land
Ownership Survey
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The ABA brings together all categories of banking
institutions to best represent the interests of
this rapidly changing industry. Its membership -
which includes community, regional and money
center banks and holding companies, as well as
savings associations, trust companies and savings
banks - makes ABA the largest banking trade
association in the country. ABA can be found on
the world wide web at http//www.aba.com.
This Review of the 1999 USDA Agriculture
Economics and Land Ownership Survey was prepared
by the Center for Agricultural and Rural Banking
of the American Bankers Association.
AELOS data may be found on the USDA website
http//www.nass.usda.gov/census/census97/aelos/ae
los.htm
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Center for Agricultural and Rural Banking