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The Farm Credit System
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The Farm Credit System was created in 1916 by the U.S. Congress to fill
a need for long-term agricultural credit. For the past 90 years, this
network of lending institutions has provided America's farmers, ranchers
and other rural enterprises with the capital they need to operate their
businesses.
The Farm Credit Administration,
an agency of the federal government created in 1933, provides regulatory
oversight for the System. The funds for
loans made by CoBank and other entities in the System come from the sale
of Farm Credit securities through the
Federal Farm Credit Banks Funding Corporation, which are backed by
the U.S. government and are therefore attractive to investors.
Within the Farm Credit System are more than 90 local Agricultural Credit
Associations (ACAs) that work directly with farmers, ranchers rural
homeowners and rural
businesses. These ACAs are each affiliated with one of five banks
that serve as the primary lender to the association. Four of these
banks are Farm Credit Banks; CoBank is the only Agricultural Credit
Bank, a distinction arising out of a past merger between a Farm Credit
Bank and a Bank for Cooperatives.
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