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RMFU objects to farm credit sale to foreign bank
Rocky Mountain Farmers Union (RMFU) joins the National Farmers Union (NFU) in urging the U.S. Senate and House Agriculture committees to hold a series of field hearings and congressional hearings on the impact of Rabobank's proposal to acquire Farm Credit Services of America (FCSA). Rabobank, a Netherlands based international banking conglomerate announced plans July 30, to purchase FCSA, which serves agricultural producers in Wyoming, South Dakota, Nebraska and Iowa.
"FCSA is a member of the U.S. Federal Farm Credit System that is chartered by Congress to serve the credit needs of American producers and rural communities. Allowing this purchase is a bit like allowing a foreign entity to buy the Statue of Liberty," said RMFU President John Stencel. "We urge Congress to delve into the long-term ramifications of such a proposal."
RMFU objects to the purchase of FCSA by a foreign for-profit entity because the mission of the lending organization would change, with profit the only objective, rather than producer access to credit in good and bad economic times. In addition, opponents say that decisions will be made half way around the globe versus the current system of decision-making by a board of producer members.
"During the Farm Credit System bailout in 1988, taxpayer loans were used to maintain the system and preserve its ability to serve U.S. producers and rural communities," Stencel said. "It would be irresponsible both from the point-of-view of past investments as well as because of future service to sell this entity to Rabobank."
NFU, which represents RMFU at the national level, says it is concerned that assistance to beginning farmers, commitments to local communities and access to competitive agricultural credit for all producers may be shoved aside as the new institution establishes its lending practices within the global banking environment in which Rabobank already operates.
"Through the cooperatively owned institutions of the Farm Credit System, American agricultural producers and rural communities have been provided access to competitive sources of credit during both good and bad agricultural production and price cycles," said NFU President Dave Frederickson. "We believe that farmers and ranchers should continue to own and control a strong financial services cooperative that is dedicated exclusively to meeting their needs."
Date: 8/25/04
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