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Farm Credit customer thinks it is time for modernization
I have been farming since about 1970. My farm operation consists of poultry, cattle, hay and fescue seed production. While I may not be a financial expert, I do understand profits and loss, cash flow and return on assets. The basic knowledge of such things is a must for anybody who owns and operates their own business. The president of the Community Bankers Association of Kansas, Mr. Paul Boeding, recently wrote to criticize Farm Credit (June 11, Page 4-B). As a customer of Farm Credit and a former customer of a community bank, there were some points that didn't make sense because the whole story was not told. Mr. Boeding said there is no indication that there is a lack of credit in rural areas. I have talked to young, beginning farmers and those who want to return to the family farm. If we want to see them succeed, there is a need for reliable credit in our rural areas. Farm Credit fills that gap now and plans to continue to in the future. Yes, they use subsidized credit for some of these young farmers. Anybody in the agriculture or finance industry knows there is a higher risk involved for young, beginning farmers. It only makes good business sense to subsidize. Another point that was not revealed in whole was regarding Farm Credit's earnings. As a customer of Farm Credit, I am also an owner of Farm Credit. Farm Credit is a cooperative owned by its customers. At the end of the year if there is a profit, that money gets sent back to the owners as a patronage dividend. I get to share in the profits, which effectively lowers the cost I pay in interest on my loan. At my local bank, I was only a customer. At the end of the year if there was a profit, that money went into the pockets of the bankers (and the stockholders). I didn't see a penny of it. The whole story is that I can get money back from Farm Credit and never have I gotten money back from a bank. I also get to vote for director representation at Farm Credit. I have a voice that they want to hear. My local bank never asked for my opinion on who should serve as a board member or other matters. We need long-term, reliable sources of agricultural financing in rural America. We need financing experts who understand agriculture and rural communities. Farm Credit isn't trying to leave my industry, but they are trying to prepare to serve me as my operation changes. I have modernized my farm over the past 35 years. It's time we modernize the rules for my Farm Credit. --David Baker, Stark City, Mo. Date: 7/11/07
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