By John Stencel
Rocky Mountain Farmers Union (RMFU) is opposed to the possible purchase of a member of the Federal Farm Credit System, Farm Credit Services of America (FCSA), by the international, Netherlands-based banking conglomerate Rabobank. The proposal is attractive, as it would yield good payouts to cash-strapped producer owners, yet the long-term impact of such a sale needs to be closely examined.
RMFU opposes the proposed purchase for these reasons:
• U.S. taxpayer dollars have been invested to establish and maintain the FSCA.
Congress designed and mandated the Farm Credit System—of which FSCA is a part—to provide agricultural credit to rural America, a system that has been in place for 80 years. In 1988, Congress voted to recapitalized the system using taxpayer loans and other assistance. This enabled the lending system to maintain its integrity and to preserve its commitment to U.S. producers and rural communities.
• The mission of the lender would change.
As a member of the Federal Farm Credit System, the FSCA is charged by Congress with the narrow mission of serving the credit needs of farmers, ranchers and their rural communities. While the system must remain financially viable, profitability is secondary to providing credit to U.S. producers. If sold, the FSCA’s priorities would definitely shift, making profit the primary, if no the only, objective. If the sale goes through, federally-mandated requirements, such as borrower’s rights, assistance for beginning producers, commitment to the local community and access to competitive credit programs, are not assured or even likely.
• It sets a dangerous precedence.
If this sale goes through, it sets us on a whole new plane of what is acceptable. Whereas it was once unthinkable for a foreign entity to own a U.S. company, it is now commonplace. Now, the next tier of what was once thought unacceptable is being attempted, as a foreign entity proposes the purchase of a user-owned, taxpayer-supported, congressionally-mandated cooperative. What could be next? In ten years, will Americans debate the foreign purchase of our schools, police forces or airports? Sounds crazy, but please remember that a decade or two ago, the thought of a foreign corporation purchasing the FSCA would have been ludicrous.
RMFU has joined National Farmers Union and other organizations in calling for Congress to hold field hearings as well as congressional hearings on the impact of Rabobank’s proposed purchase of FCSA. We implore Congress to ensure that no final action take place until hearings have been held.
We understand the appeal of instant cash payouts for owner-members, but urge producers not to quickly give up local control, congressionally-mandated credit availability, borrower’s rights and ownership of their lending institution for short-term economic gain.