HORIZONS:  Working to increase the availability of capital to U.S. agriculture and rural America

by George Putnam, president and CEO, Yankee Farm Credit

A year ago, former Yankee president and CEO Dean W. Moreau introduced the Farm Credit HORIZONS project to you in this column. My column will refresh your memory of this very important project and also offer you an update on its progress over the past year.

What is Farm Credit HORIZONS?

U.S. agriculture and rural America are changing. The HORIZONS project is an initiative to study those changes, and recommend how Farm Credit should change to keep up with the evolving needs of its customers.

"Please contact your account manager or me if you would like to help us achieve the HORIZONS goal ..."

Who was involved in the study?

Each Farm Credit institution was asked to complete a survey on their customers’ needs. More than 100 Farm Credit employees, including Susan Kelly from Yankee’s Middlebury office, participated in task forces to study different aspects of U.S. agriculture and rural America. HORIZONS also invited 19 experts, mostly from Land Grant Universities, to write papers on a variety of issues. And hundreds of Farm Credit directors and employees reviewed and discussed the findings.

What were the findings?

HORIZONS identified eight key findings about U.S. agriculture and rural America. Here are just two: • American farmers are not a homogeneous group. There is a tremendous diversity among farmers in terms of farm type and size. No matter what kind of farmer you are, other people — who also think of themselves as farmers — are nothing like you. This diversity has been increasing in recent decades. • Ongoing access to debt and equity capital is paramount to the future prosperity of U.S. agriculture and rural America. This was true 90 years ago when the Farm Credit System was founded, and it is still true today. Moreover, it is not just traditional farmers who need capital. Rural America also needs capital. In the past, rural America consisted largely of farmers, but today farmers are a small minority, even in rural America. All findings are discussed in the HORIZONS report. You can obtain a free copy of this report from any of our branch offices or online at www.fchorizons.com.

How can Farm Credit help?

We, at Farm Credit, believe we can help provide more capital to rural America, for the benefit of farmers. But our current authorities have limitations. For example, we cannot lend to an agricultural processing operation unless it is majority-owned by farmers. Similarly, we cannot lend to a business that provides specialized inputs to farmers unless it is majority-owned by farmers. We believe farmers would benefit if such businesses had additional sources of capital.

What next?

The Farm Credit System developed a legislative proposal for Congress to consider. If approved by Congress, it would allow the System to provide capital to businesses primarily engaged in supporting farmers. The System hopes this proposal will be considered in the next Farm Bill.

How can you help?

Commercial bankers do not want Farm Credit to have additional authorities. If you believe that you would benefit from increased availability of capital to businesses that support your farming operation, we welcome your support of this legislative proposal. We also welcome the support of farming and rural organizations to which you belong.

Please contact your account manager or me if you would like to help us achieve the HORIZONS goal of increasing the availability of capital to U.S. agriculture and rural America.

This letter appeared in the Winter 2006 issue of Financial Partner (F.P.) magazine, Yankee Farm Credit's customer publication. Click here if you would like to start receiving F.P. magazine in the mail.

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