Leaders of Farm Credit Services of Mid-America, based in Louisville, KY, say the proposed acquisition of Omaha, NE based Farm Credit Services of America (FCSAmerica) by the international banking giant Rabobank would be bad for U.S. agriculture.
Recently, Rabobank announced a plan to purchase FCSAmerica, a $7.8 billion Farm Credit Association serving Iowa, Nebraska, South Dakota and Wyoming. Rabobank is a $500 billion lending conglomerate based in the Netherlands.
Bob Barton, the Board Chairman of Farm Credit Services of Mid-America, who is a cattle, grain and tobacco farmer from Lexington, Ky, says, "Our directors have discussed the FCSAmerica acquisition by Rabobank extensively since the announcement was made. Even though our association is not involved in this acquisition, we believe it is necessary for our association to publicly state our position on this transaction. Our board unanimously approved the following position statement on the Rabobank acquisition of FCSAmerica:
"We strongly oppose FCSAmerica leaving the Farm Credit System and being purchased by Rabobank. The System was created by Congress as a farmer-owned and controlled method of assuring that adequate, competitively priced credit was available to farmers in good times and bad. We strongly believe that this mission continues to be important today and can best be served by remaining part of the System. We do believe that the System needs to continuously make changes to serve the needs of farmers today and in the future. We further believe that this can be done by working closely with the Farm Credit Administration, Congress and key farm groups to identify and implement needed legislative and regulatory changes.
"Therefore, we encourage the board of directors of FCS of America to reconsider their position and explore options for obtaining their goals while remaining in the System. If they are unwilling to do so, we then encourage the Farm Credit Administration to decline their application to exit the System due to the impact it will have on the System's ability to meet its Congressional mandate and farmers' ability to consistently obtain credit in the four states FCSAmerica serves."
In the past years, Rabobank acquired Valley Independent Bank in California; Lend Lease Agribusiness, formally part of Equitable Insurance; and Ag Services of America, a lender based in Cedar Falls, Iowa. If the FCSAmerica acquisition occurs, Rabobank would control the largest portfolio of U.S. farm loans of any single lender.
"As a customer-owned cooperative, Farm Credit's mission is to help ensure the quality of life in rural America and on the farm. As owners, farmers and ranchers can ensure that Farm Credit remains dedicated to their needs in good times and bad," says Barton. If this acquisition is approved, the resulting entity will have no mandate to focus its lending to the farmers and ranchers of Iowa, Nebraska, South Dakota or Wyoming, said Barton.
Should the acquisition move forward, it would not impact members of Farm Credit System associations in other states, including those in Kentucky, Indiana, Ohio or Tennessee, says Donnie Winters, President and Chief Executive Officer of Farm Credit Services of Mid-America which serves those four states.
"Our mission is to provide a reliable source of competitively priced credit to all segments of rural America, through good and bad agriculture cycles, to today's farmers and to future generations. The best way to meet that mission is by remaining a strong player in a viable Farm Credit System," Winters says. "The capital that has been accumulated by FCS of Mid-America has come from several generations of customers and is being used to allow us to provide reliable credit at rates far lower than would otherwise be possible. The fact that our farmers borrow money at rates not available to other small businesses is evidence that we are providing value to our cooperative borrower/stockholders from the capital we hold."
Farm Credit Services of Mid-America is an $8 billion Association, serving more than 65,000 customers in Indiana, Kentucky, Tennessee and Ohio.