» Congress passes Farm Credit Act amendments
WASHINGTON, D.C. - At
the eleventh hour of the lame
duck session of Congress, the
Farm Credit Act Amend
ments cleared their final
hurdle and were enacted mto
law. Passage culminated a
legislative process that
lasted more than a year.
The Senate passed its
version of the bill, 51465 last
July 24, and the House
enacted its version HR 7548
November 19. With ad
journment imminent, the
Senate accepted the House
bill last Saturday
It has the support of the
Administration, and the
President’s signature is
expected.
> The amendments are the
first major change in
legislation governing
operations of the Farm
Credit System since enact
ment of the Farm Credit Act
of 1971, which recodified and
modernized laws dating
back to 1916.
The Farm Credit System
provides credit and closely
related services to farmers,
ranchers, commercial
fishermen, and their
cooperatives. They also
serve rural homeowners and
selected farm related
businesses. The amend
ments call for no change in
this chentele
The Farm Credit System
is made up of three lending
groups. The 12 Federal Land
Banks make long-term
mortgage loans through 492
Federal Land Bank
Associations
The 12 Federal In
termediate Credit Banks
provide short- and m
termediate-term loan funds
to 424 Production Credit
Associations and to other
financing institutions ser
ving agricultural producers
The 13 Banks for
Cooperatives make loans of
all kinds to agricultural,
aquatic, and rural electric,
telephone, and public utility
cooperatives.
The System has $6B billion
in loans outstanding to
Easier mone
nearly one million in
dividuals and 3500
cooperatives.
Its loan funds are obtained
primarily through the sale of
securities m the Nation’s
money markets.
Though cooperatively
owned by their borrowers,
the System’s federally
chartered banks and
associations are supervised
in the public interest by the
Farm Credit Ad
ministration, an independent
agency in the Executive
Branch of the U S. Govern
ment. Operating and other
costs of the System in
stitutions and their super
visory agency are borne by
the borrowers. No Federal
tax dollars are involved.
The amendments will help
individual borrowers by.
Permitting the FLBs to
make loans of up to 97
percent of the market value
of the property taken as
security when the loans are
guaranteed by a Federal
agency such as the Farmers
hr new farmers
Home Administration or a
state government. This
makes it possible for the
banks to finance those with
limited equity, particularly
young farmers. It is also in
tune with FmHA’s shift in
emphasis from direct loans
to guaranteed loans.
The limit on the other
loans will remain at 85
percent of the appraised
value of the security.
Broadening the authority
of FLBs and PCAs to finance
the processing and
marketing activities of bona
fide farmers, ranchers, and
fishermen. To be eligible for
such loans, 20 percent of the
product processed or
marketed must come from
the lead borrower’s
operation.
Establishing clearly that
FLBAs and PCAs may sell
credit or term life, credit
disability, and other types of
insurance necessary to
protect the member’s farm
or aquatic unit This service
is limited to hail and
Lancaster Farming, Saturday, December 20,1980—A15
multiple peril crop in
surance, title insurance, and
insurance to protect the
equipment and facilities of
fishermen.
Expanding aquatic
financing to allow FLBs to
make long-term loans and
permitting FICBs to
discount aquatic loans of
other financing institutions.
Allowing Farm Credit
institutions to provide
fishermen with financial
services related to their
operations.
The amendments are
beneficial to cooperatives
by:
Lowering to 60 percent the
farmer membership
requirement for rural
electric, telephone, and
public utility cooperatives
and for certain local farm
supply cooperatives.
Marketing and other
cooperatives will still have
to satisfy the 80 percent
farmer membership
requirement to be eligible to
borrow from a Bank for
Cooperatives.
Establishing
THIRD ANNUAL AUCTION
DOOR PRIZE WINNERS
★ HOMELITE 330 CHAIN SAW:
Elam N.Martin, Leola, PA
★ SK SOCKET SET:
Frank E. Shaffer, Gordonville, PA
★ ROCKWELL SANDER:
Dan Burkholder, New Holland, PA
★ DRYDENE OIL:
Aaron Zimmerman, Manheim, PA
★ DEKA 12 FT. BOOSTER CABLE:
Elvin Oberhcltzer, Ephrata, PA
★ WHITE 2-180 TOY TRACTOR:
Morris H. Kisey, Morgantown, PA
★ WHITE 2-180 TOY TRACTOR:
Melvin Weaver, Ephrata, PA
★ WHITE 2-155 TOY TRACTOR:
Gerald L. Stover, Brownstown, PA
★ WHITE 2-155 TOY TRACTOR:
Ephraim Oberholtzer, Ephrata, PA
★ WHITE 2-135 TOY TRACTOR:
Lloyd Reiff, Leola, PA
★ WHITE 2-135 TOY TRACTOR:
Ray Firestone, Ephrata. PA
M HOLIDAY
SCHEDULE:
CLOSED THURSDAY DECEMBER
24 AT 4:00 PM f REOPENING
MONDAY, DECEMBER 29
at 7:30 A.M.
CLOSED JANUARY 1, 1981
MMMMMMMMMMMMMMTCMm
FARMERSVILLE EQUIP.
INC.
RD 4 EPHRATA, PA
PHONE 717-354-4271
cooperatives organized to
provide business services to
commercial fishermen are
eligible to borrow from a
Bank for Cooperatives.
Permitting the Banks for
Cooperatives to finance
certain export activities of
cooperatives, making it
possible for farmers to more
directly benefit from these
activities.
Other facets of the
legislation mclude;
Permitting PCAs to issue
participation certificates to
commercial banks and other
lenders, streamlining the
method by which PCAs can
participate in loans
originated by others.
Making possible the in
corporation of entities that
perform service and finance
functions for the banks and
associations.
Farm Credit officials say
they view the amendments
as providing the banks and
association with the con
temporary authorities they
need to serve the changing
needs of their borrowers in
the 1980 s.
that