Farm Credit System Reform
The Farm Credit System (FCS) is a $321 billion government-sponsored enterprise (GSE) that competes directly with banks, making farm, ranch, consumer, housing, business and energy loans.
If the FCS were a bank, it would the nation’s seventh largest. The FCS was the first GSE, established in 1916, when farmers had limited options available to finance their operations. However, thanks to a robust banking industry, that is no longer the case today, and farmers enjoy the same credit opportunities as their urban counterparts. As a GSE, the FCS also does not pay taxes at the same rate as banks; yet with more than $4.85 billion in profits annually, the FCS is more than capable of paying its fair share. Additionally, more than 68 individual FCS associations have more $1 billion in assets, making them larger than 88 percent of the banks in the country.
As Congress continues to examine additional opportunities for tax reform, we urge members to eliminate the FCS tax subsidy, so that farm credit lenders that currently compete with traditional banks do so without an unnecessary and unfair tax advantage.