The Farm Credit System

The Farm Credit System was created in 1916 by the U.S. Congress to fill a need for long-term agricultural credit. For the past 90 years, this $214 billion network of lending institutions has provided America's farmers, ranchers and other rural enterprises with the capital they need to operate their businesses.

Today, the Farm Credit System supplies U.S. agriculture with approximately 37 percent of its credit needs. Within the Farm Credit System there are more than 90 local Farm Credit associations who work directly with farmers, ranchers, aquatic producers, rural homeowners and other rural businesses to provide a variety of lending solutions and other financial services. These include Agricultural Credit Associations (ACAs), which are financial cooperatives owned by the customers they serve, as well as Production Credit Associations (PCAs) and Federal Land Credit Associations (FLCAs).

ACAs are each affiliated with one of five banks that serve as the primary lender to the association. Four of these banks are Farm Credit Banks; CoBank is the only Agricultural Credit Bank, a distinction arising out of a past merger between a Farm Credit Bank and a Bank for Cooperatives.

The Farm Credit Administration, an agency of the federal government created in 1933, provides regulatory oversight for the System. The funds for loans made by entities in the System come from the sale of Farm Credit securities through the Federal Farm Credit Banks Funding Corporation, which are backed by the U.S. government and are therefore attractive to investors.