The problems and prospects of the farm credit system

Abstract

Harsh and inaccurately forecasted economic conditions placed stresses on the Farm Credit System (FCS) and caused the organization to incur losses beginning in the mid-1980s. In recent years, the FCS has been neither more nor less able to avoid problem farm loans than commercial banks. But, because of the composition of the FCS portfolio, the problems of the FCS are more severe than those of banks. Federal legislation designed to bolster the FCS achieved certain short-term objectives in 1985 and 1986. However, even with additional federal assistance, the longer-term prospects for the FCS are uncertain since problems which created difficulties for the FCS in the mid-1980s remain unsolved.