Federal Farm Credit System (FFCS) Definition
The Federal Farm Credit System is a group of banks or other specialty financial organizations that finance US farming and ranching activities. The FFCS is comprised of:
- 3 Farm Credit Banks (FCBs),
- 72 Agricultural Credit Associations(ACAs),
- A Federal Land Credit Association (FLCA), and
- an Agricultural Credit Bank (CoBank).
The CoBank is a capital lender to the ACAs, the FLCA, and. can provide loans to Agricultural Credit Associations, the Federal Land Credit Association, agricultural cooperatives, rural utilities and aquatic cooperatives. It also helps to finance imports and exports of U.S. agricultural products and provides international banking services for farmer-owned cooperatives.
A Little More on What is the Federal Farm Credit System (FFCS)
The Federal Farm Credit System evolved from the creation of Federal Land Banks and National Farm Loan Associations, as part of the Federal Farm Loan Act of 1916. In 1923, the Agricultural Credits Act established twelve Federal Intermediate Credit Banks to provide farmers with short-term loans through cooperatives. In 1968, once all loans made through these cooperatives were repaid, the cooperative organizations were wholly owned or controlled by the cooperative members.
The Federal Farm Credit System suffered financial through the 1970s and 80s because of rising costs and competition. In 1985, Congress passed the Farm Credit Amendment Act and amended it further with the 1987 Agricultural Credit Act, which increased regulation and extended additional credit to the organization. It also created the Federal Agricultural Mortgage Corporation (Farmer Mac).