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Reform of Farm Credit System Sought
Updated: Sat, Aug 04 1:28 AM EDT
By MIKE WILSON, Associated Press Writer
DES MOINES, Iowa (AP) - Lenders say regulations need to be eased to make it easier for farmers to get credit.
Banks that are not members of the Farm Credit Services system contend current regulations that tend to favor FCS banks make serving farmers
too costly.
Easing the regulations would allow farmers to pick the banks or financial institutions that would best serve their needs, lenders from across the
country told the Farm Credit Administration at a meeting here Friday.
The agency, which oversees the farm-credit associations that comprise the FCS, is
seeking suggestions on ways to improve the flow and availability of credit to agriculture
and rural communities.
"We hope to improve credit opportunities by forming alliances between lenders," said
Michael Reyna, board chairman of the Farm Credit Administration "We want to make
sure regulations are part of the solution and not part of the problem."
Cecil Gibson, chief executive officer of the National Livestock Credit Corp. in Oklahoma
City, said rules that require non-FCS banks to do business with FCS-member banks
based on their location prevents them "from shopping around to find the best deal
available on the front end."
The geographic requirement is especially harmful to value-added producers, said Ron
Kardel, treasurer of the Iowa Turkey Growers Co-op in West Liberty.
"For me to approach Farm Credit Services, first I have to educate local people about
poultry and turkey," he said. "It helps me to deal with someone in Georgia, where they
have people who already know about poultry and turkey, and it helps me cut through
the chase."
William Knox, who works for the Bank of Whitman in Colfax, Wash., said the administration must make it easier for non-FCS banks such as his to
participate in FCS programs. He suggested the agency start by creating a simpler application form and a central office to help banks with
applications and marketing to potential customers.
"We need to somehow put the money back into the farmer's pockets," said Chris Peterson, vice president of the Iowa Farmer's Union in Des
Moines.
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Last Revised: August 27, 2001
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