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AGRICULTURAL LENDING INSTITUTIONS

AGRICULTURAL LENDING INSTITUTIONS. COMMERCIAL BANKS FARM CREDIT SYSTEM FARM SERVICES ADM. INSURANCE COMPANIES INDIVIDUALS INPUT SUPPLIERS. COMMERCIAL BANKS.

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AGRICULTURAL LENDING INSTITUTIONS

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  1. AGRICULTURAL LENDING INSTITUTIONS • COMMERCIAL BANKS • FARM CREDIT SYSTEM • FARM SERVICES ADM. • INSURANCE COMPANIES • INDIVIDUALS • INPUT SUPPLIERS

  2. COMMERCIAL BANKS • IN 2002, FARM BUSINESS DEBT PROVIDED BY COMMERCIAL BANKS ACCOUNTED FOR 17.6% OF REAL ESTATE DEBT AND 21.8% OF NON REAL ESTATE DEBT.

  3. AGRICULTURAL BANKS • 1987 ==> 4480 AG. BANKS 1999==> 2942 AG. BANKS • 1994 ==> 3548 AG. BANKS 2001==> 2744 AG. BANKS • 1995 ==> 3363 AG. BANKS 2002==> 2644 AG. BANKS WHAT IS AN AG. BANK? FEDERAL RESERVE DEF. A BANK THAT HAS AN AG. LOAN RATIO GREATER THAN THE AVERAGE FOR ALL COMMERCIAL BANKS. ON 6/30/02 14.97%

  4. FARM CREDIT SYSTEM • THE FARM CREDIT SYSTEM (FCS) IS MADE UP OF FOUR REGIONAL FARM CREDIT BANKS. • THESE BANKS PROVIDE FUNDS FOR PRODUCTION CREDIT ASSNS. (PCAs), FEDERAL LAND BANKS ASSNS. (FLBAS), AGRICULTURAL CREDIT ASSNS. (ACAs), AND FEDERAL LAND CREDIT ASSNS. (FLCAs). • REGULATED BY THE FARM CREDIT ADM., WHICH IS AN INDEPENDENT AGENCY OF THE FEDERAL GOVT.

  5. As of July 1, 2004, the System was composed of the following lending institutions: • Four Farm Credit Banks (FCBs) that provide loan funds to 79 Agricultural Credit Association (ACAs), and 11 Federal Land Credit Associations (FLCAs). ACAS make short-, intermediate-, and long-term loans and FLCAs make long-term loans. • One Agricultural Credit Bank (ACB), which has the authority of an FCB and provides loan funds to 5 ACAs. In addition, the ACB makes loans of all kinds to agricultural, aquatic, and public utility cooperatives and is authorized to finance U.S. agricultural exports and provide international banking services for farmer-owned cooperatives.

  6. THE FARM CREDIT SYSTEM ACCOUNTS FOR 20.0% OF REAL ESTATE LOANS AND 10.3% OF NON REAL ESTATE LOANS. • FUNDING IS OBTAINED BY SELLING BONDS IN THE MONEY MARKETS.

  7. TEXAS BANK • 8 Federal Land Credit Assns. • 13 Ag Credit Assns. • TOTAL LOANS AS OF SEPT. 30, 2001 ==> $5.214 BILLION • THERE HAS BEEN CONSIDERABLE CONSOLIDATION OF PCAs AND FLBAs IN THE PAST FEW YEARS

  8. FARM SERVICES ADM. • THE FARM SERVICES ADM. (FSA) WAS FORMERLY THE FARMERS HOME ADM. (FmHA). • ACCOUNTS FOR 1.7% OF REAL ESTATE LOANS AND 1.8% OF NON REAL ESTATE LOANS. • HAS BEEN DECREASING IN AMOUNT OF CREDIT PROVIDED.

  9. DEBT (MIL $) DIRECT GUARANTEED 1986 2807.9 1569.1 1990 921.3 1271.9 1995 563.6 1938.3 1999 1288.9 2550.4 2000 1048.1 2674.1 2001 943.6 2314.9 2002 903.6 2650.9

  10. DELINQUENT LOANS (%) DIRECT GUARANTEED 1986 31.9 5.6 1990 26.9 4.6 1995 27.1 3.9 2000 15.5 4.5 2001 15.2 4.6 2002 15.9 5.9

  11. LIFE INSURANCE COMPANIES • ACCOUNTS FOR 6.1% OF REAL ESTATE LOANS. • ONCE WERE MAJOR LENDERS IN THE AGRICULTURAL REAL ESTATE MARKETS.

  12. INSURANCE COMPAYIES CURRENTLY ACTIVE IN AGRICULTURAL LENDING ARE: AEGON-USA CItigroup Investments AgriFinance Lend Lease Agri-Business Metropolitan Life MONY Life Insurance Prudential

  13. INDIVIDUALS AND OTHERS • ACCOUNTS FOR 9.6% OF REAL ESTATE LOANS AND 11.2% OF NON REAL ESTATE LOANS. • NON-TRADITIONAL LENDERS -- JOHN DEERE -- FORD NEW HOLLAND -- PIONEER HI-BREEDS LEASING AND FINANCING OF EQUIPMENT AND SUPPLIES.

  14. FARMER MAC • FEDERAL AGRICULTURAL MORTGAGE CORP. • PROVIDES A SECONDARY MARKET FOR AGRICULTURAL LOANS. • POOLS FARM MORTGAGE LOANS AND SELLS THEM TO INVESTORS. • SIMILAR TO THE GNMA MARKET.

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