Farm Credit System Strong, but Concerns Abound over Farmers

The farm credit system is financially sound and able to handle loan money to farmers, but are producers in positions to borrow it?

Dallas Tonsager, CEO of Farm Credit Administration said he has concerns.

“Debt to asset levels are rising while net farm income is declining and crop prices are expected to remain weak.”

Many bankers saw the challenges a few years ago and began to work with producers on what they can do to maintain a positive financial position.

Some of the largest impacts have been felt by beginning farmers and ranchers according to Doug Stark with Farm Credit Services of America, which is why they have the AgStart program.

“Basically we threw out the normal underwriting standards for traditional producers and say we know they don’t have the equity or balance sheets that [traditional producers] do and we’re willing to lean into them.”

The program does require a good repayment plan, good credit history and a farm mentor and that could allow no equity loans, farm with family equipment or leasing options.