Presentation is loading. Please wait.

Presentation is loading. Please wait.

The 90th Anniversary of the Farm Credit System HOW FARM CREDIT CAME TO BE...

Similar presentations


Presentation on theme: "The 90th Anniversary of the Farm Credit System HOW FARM CREDIT CAME TO BE..."— Presentation transcript:

1

2 The 90th Anniversary of the Farm Credit System

3 HOW FARM CREDIT CAME TO BE...

4 Farm Landscape of the Early 1900’s Total U.S. Population: 75,994,266 Estimated Farm Population: 29,414,000 Farmers 38% of Labor Force Number of Farms: 5,740,000 Average Acres: 147 North Dakota, Kansas, and Minnesota chief wheat states; durum wheat becomes important commercial crop 35 states and territories require tuberculin testing of all cattle entering 1900 – 1920’s continued agricultural settlement on the Great Plains Grain production reaches into the most arid sections of the Great Plains Total U.S. Population: 75,994,266 Estimated Farm Population: 29,414,000 Farmers 38% of Labor Force Number of Farms: 5,740,000 Average Acres: 147 North Dakota, Kansas, and Minnesota chief wheat states; durum wheat becomes important commercial crop 35 states and territories require tuberculin testing of all cattle entering 1900 – 1920’s continued agricultural settlement on the Great Plains Grain production reaches into the most arid sections of the Great Plains

5 The Early 1900’s... In 1906, San Francisco had a major earthquake & fire, over 250,000 people--more than half of San Francisco's population--became homeless In the summer of 1907, the American economy was showing signs of weakness as a number of businesses and Wall Street brokerages went bankrupt As early as 1908, President Theodore Roosevelt’s “Country Life Commission” recommended a cooperative system that would provide agricultural credit on “Fair Terms” Credit for farmers was a steadily growing rural issue The Federal Reserve Act is passed The influenza epidemic of 1918 killed an estimated 50 million people, more people than died in World War I In 1906, San Francisco had a major earthquake & fire, over 250,000 people--more than half of San Francisco's population--became homeless In the summer of 1907, the American economy was showing signs of weakness as a number of businesses and Wall Street brokerages went bankrupt As early as 1908, President Theodore Roosevelt’s “Country Life Commission” recommended a cooperative system that would provide agricultural credit on “Fair Terms” Credit for farmers was a steadily growing rural issue The Federal Reserve Act is passed The influenza epidemic of 1918 killed an estimated 50 million people, more people than died in World War I

6 The Mission of Farm Credit Creation of the Farm Credit System coincided with World War I, a very prosperous time for American farmers due to the demand for food in Europe Prices collapsed after the war, and among the resulting economic problems were severe shortages of long- and short-term credit for farmers; if available, it was often very expensive Recognizing the importance of agriculture to our nation's economy, Congress passed the Federal Farm Loan Act which was signed into law by U.S. President Woodrow Wilson on July 17, 1916 Farm Credit is one of the nation's oldest financial institutions, created to provide for the farmer-owned cooperative system of making credit available to farmers and ranchers and their cooperatives, for rural residences, and to associations and other entities upon which farming operations are dependent, in order to provide for an adequate and flexible flow of money into rural areas Creation of the Farm Credit System coincided with World War I, a very prosperous time for American farmers due to the demand for food in Europe Prices collapsed after the war, and among the resulting economic problems were severe shortages of long- and short-term credit for farmers; if available, it was often very expensive Recognizing the importance of agriculture to our nation's economy, Congress passed the Federal Farm Loan Act which was signed into law by U.S. President Woodrow Wilson on July 17, 1916 Farm Credit is one of the nation's oldest financial institutions, created to provide for the farmer-owned cooperative system of making credit available to farmers and ranchers and their cooperatives, for rural residences, and to associations and other entities upon which farming operations are dependent, in order to provide for an adequate and flexible flow of money into rural areas

7 The Birthplace of Farm Credit The System was born through the Farm Loan Act of 1916 as a GSE Funding of the loans came from the U.S. Treasury Provided seed money for System to lend ($5 entry fee) 280 acres was collateral for the nation's first Federal Land Bank loan made on April 10, 1917, to farmer- stockman, A. L. Stockwell In 1917, Wichita was granted the first of 12 Federal Land Bank charters nationwide and charged with developing lending programs in Kansas, Oklahoma, Colorado, and New Mexico Charters were also granted to St. Paul, Louisville, St. Louis, and eight other Federal Land Banks The System was born through the Farm Loan Act of 1916 as a GSE Funding of the loans came from the U.S. Treasury Provided seed money for System to lend ($5 entry fee) 280 acres was collateral for the nation's first Federal Land Bank loan made on April 10, 1917, to farmer- stockman, A. L. Stockwell In 1917, Wichita was granted the first of 12 Federal Land Bank charters nationwide and charged with developing lending programs in Kansas, Oklahoma, Colorado, and New Mexico Charters were also granted to St. Paul, Louisville, St. Louis, and eight other Federal Land Banks

8 The U.S. in the 1920’s Post War Recession Average Annual Salary: $1,236 Unemployment: 5.2% Quart of milk costs 14 cents and a loaf of bread costs 9 cents Women get the right to vote in 1920 Prohibition begins - prohibiting making, selling, possession, and use of alcohol; this was not repealed until 1933 Movie houses become common in rural areas & radio broadcasts begin People loved to dance, especially the Charleston, Fox-trot, and the Shimmy Penicillin and discovery of insulin for diabetics were some of the major breakthroughs in medicine and science Babe Ruth signs a three-year contract with NY Yankees for $52,000 highest ever The peanut butter and jelly sandwich became famous in 1922 The first talking movie, The Jazz Singer, released in 1927 Spirit of St. Louis and pilot, Charles Lindbergh, land in Paris the stock market crashes and the “Great Depression” begins The #1 book on the bestseller list was a “Miss Manners” book by Emily Post Post War Recession Average Annual Salary: $1,236 Unemployment: 5.2% Quart of milk costs 14 cents and a loaf of bread costs 9 cents Women get the right to vote in 1920 Prohibition begins - prohibiting making, selling, possession, and use of alcohol; this was not repealed until 1933 Movie houses become common in rural areas & radio broadcasts begin People loved to dance, especially the Charleston, Fox-trot, and the Shimmy Penicillin and discovery of insulin for diabetics were some of the major breakthroughs in medicine and science Babe Ruth signs a three-year contract with NY Yankees for $52,000 highest ever The peanut butter and jelly sandwich became famous in 1922 The first talking movie, The Jazz Singer, released in 1927 Spirit of St. Louis and pilot, Charles Lindbergh, land in Paris the stock market crashes and the “Great Depression” begins The #1 book on the bestseller list was a “Miss Manners” book by Emily Post

9 Farm Landscape of the 1920’s Total Population: 105,710,620 Farm Population: 31,614,269 Farmers 27% of Labor Force Number of Farms: 6,454,000 Average Acres: 148 Agricultural exports in the 1920’s reach $1.94 billion or 42% of total exports Farm production gradually grows from expanded use of mechanized power Truckers begin to capture trade in perishables and dairy products 1920 – 31,000 students are enrolled in agricultural courses 1926 – Cotton stripper was developed 1926 – First Hybrid-seed corn company organized 1928 – Future Farmers of America founded 1929 – The National Council of Farmer’s Cooperatives organized Total Population: 105,710,620 Farm Population: 31,614,269 Farmers 27% of Labor Force Number of Farms: 6,454,000 Average Acres: 148 Agricultural exports in the 1920’s reach $1.94 billion or 42% of total exports Farm production gradually grows from expanded use of mechanized power Truckers begin to capture trade in perishables and dairy products 1920 – 31,000 students are enrolled in agricultural courses 1926 – Cotton stripper was developed 1926 – First Hybrid-seed corn company organized 1928 – Future Farmers of America founded 1929 – The National Council of Farmer’s Cooperatives organized

10 Farm Credit in the 1920’s – The Fiscal Agency Office opened in Washington, DC, to manage the sale of Farm Credit bonds; moved to New York City in 1929 Congress responded with the Agricultural Credit Act of 1923, adding 12 Federal Intermediate Credit Banks (FICBs) to the Farm Credit System to fund banks for short- term producer credit needs; however, these were flawed by procedural and geographic problems, and a long and complicated loan approval process Federal Land Bank bonds outstanding exceeded $1 billion for the first time 1923 – The Fiscal Agency Office opened in Washington, DC, to manage the sale of Farm Credit bonds; moved to New York City in 1929 Congress responded with the Agricultural Credit Act of 1923, adding 12 Federal Intermediate Credit Banks (FICBs) to the Farm Credit System to fund banks for short- term producer credit needs; however, these were flawed by procedural and geographic problems, and a long and complicated loan approval process Federal Land Bank bonds outstanding exceeded $1 billion for the first time

11 Agriculture Legislation of the 1920’s Cooperative movement spreads Capper-Volstad Act authorized the creation of farmer cooperatives 1929 – Agricultural Marketing Act helped finance and develop farmer cooperatives Cooperative movement spreads Capper-Volstad Act authorized the creation of farmer cooperatives 1929 – Agricultural Marketing Act helped finance and develop farmer cooperatives

12 The U.S. in the 1930’s… Average Annual Salary: $1,368 Unemployment rises to 25% Milk costs 15 cents a quart and a loaf of bread is 9 cents Great Depression begins In 1931 the "Star Spangled Banner" became our national anthem The world's tallest building, the Empire State Building, was opened by President Hoover in New York President Roosevelt introduces the “New Deal” to America in the effort to end the Depression American woman pilot, Amelia Earhart, disappeared on a flight around the world in July of 1938 America panics when it tuned into “War of the Worlds” broadcast by Orson Wells Campbell's introduced “chicken noodle” soup in a can – some of the other new foods of the 30’s were the famous Spam, Fritos, and Twinkies Average Annual Salary: $1,368 Unemployment rises to 25% Milk costs 15 cents a quart and a loaf of bread is 9 cents Great Depression begins In 1931 the "Star Spangled Banner" became our national anthem The world's tallest building, the Empire State Building, was opened by President Hoover in New York President Roosevelt introduces the “New Deal” to America in the effort to end the Depression American woman pilot, Amelia Earhart, disappeared on a flight around the world in July of 1938 America panics when it tuned into “War of the Worlds” broadcast by Orson Wells Campbell's introduced “chicken noodle” soup in a can – some of the other new foods of the 30’s were the famous Spam, Fritos, and Twinkies

13 Farm Landscape of the 1930’s Total Population: 122,775,046 Farm Population: 30,455,350 Farmers 21% of Labor Force Number of Farms: 6,295,000 Average Acres: 157 Irrigated Acres: 14,633,252 Agricultural exports in the 1930’s fall to $765 million or 32% of total exports Farm income & prices hit rock bottom in 1932 The Dust Bowl brings devastation to numerous farmers Farmers default on loans, many loans in foreclosure, and many farmers lose their land Farm Credit experiencing significant loan losses – government assistance provided Rural Electrification Act (REA) brought electricity to rural America Farm to markets roads emphasized in Federal road building Total Population: 122,775,046 Farm Population: 30,455,350 Farmers 21% of Labor Force Number of Farms: 6,295,000 Average Acres: 157 Irrigated Acres: 14,633,252 Agricultural exports in the 1930’s fall to $765 million or 32% of total exports Farm income & prices hit rock bottom in 1932 The Dust Bowl brings devastation to numerous farmers Farmers default on loans, many loans in foreclosure, and many farmers lose their land Farm Credit experiencing significant loan losses – government assistance provided Rural Electrification Act (REA) brought electricity to rural America Farm to markets roads emphasized in Federal road building

14 Farm Credit in the 1930’s Farm Credit Act authorized Production Credit Associations and created 13 Banks for Cooperatives 1933 – Farm Credit Administration (FCA) created by executive order Farm Credit Act authorized Production Credit Associations and created 13 Banks for Cooperatives 1933 – Farm Credit Administration (FCA) created by executive order

15 Agriculture Legislation of the 1930’s… 1933 – Agricultural Adjustment Act initiates crop and marketing controls In 1935, Social Security was enacted 1938 – Agricultural Adjustment Act provides acreage allotments and quotas, granary, and price- supporting loans, regional research laboratories and Federal Crop Insurance! 1933 – Agricultural Adjustment Act initiates crop and marketing controls In 1935, Social Security was enacted 1938 – Agricultural Adjustment Act provides acreage allotments and quotas, granary, and price- supporting loans, regional research laboratories and Federal Crop Insurance!

16 The U.S. in the 1940’s… Unemployment is 8,120,000 or 6.1% in 1940 National debt $43 billion Average Annual Salary: $1,299 Minimum Wage: $.43 per hour 55% of U.S. homes have indoor plumbing The Japanese bomb Peal Harbor December 7, 1941, and the U.S. enters World War II. World War II changed the order of world power – the U.S. and Russia become super powers Unemployment almost disappeared as most men were drafted, the government reclassified 55% of jobs, allowing minorities and women to fill them Automobile production temporarily ceased in 1942, and rationing of food supplies began in 1943 Economic recovery from wartime The baby boom began with the birth of 3,400,000 babies The first meeting of the United Nations is held on January 10, 1946 Big bands dominated the radio with legends such as Duke Ellington, Bing Crosby, and Frank Sinatra General Mills and Pillsbury introduce “instant” cake mixes Unemployment is 8,120,000 or 6.1% in 1940 National debt $43 billion Average Annual Salary: $1,299 Minimum Wage: $.43 per hour 55% of U.S. homes have indoor plumbing The Japanese bomb Peal Harbor December 7, 1941, and the U.S. enters World War II. World War II changed the order of world power – the U.S. and Russia become super powers Unemployment almost disappeared as most men were drafted, the government reclassified 55% of jobs, allowing minorities and women to fill them Automobile production temporarily ceased in 1942, and rationing of food supplies began in 1943 Economic recovery from wartime The baby boom began with the birth of 3,400,000 babies The first meeting of the United Nations is held on January 10, 1946 Big bands dominated the radio with legends such as Duke Ellington, Bing Crosby, and Frank Sinatra General Mills and Pillsbury introduce “instant” cake mixes

17 Farm Landscape of the 1940’s Total Population: 131,820,000 Farm Population: 30,840,000 Farmers 18% of Labor Force Number of Farms: 6,102,000 Average Acres: 175 Irrigated Acres: 17,942,968 Agricultural exports $2.42 billion or 22% of total exports 58% of all farms have cars 25% have phones 33% have electricity 584,000 students enrolled in agricultural courses Increased use of herbicides and pesticides Acreage of crops, such as oats, required for horse and mule feed drop as farms use more tractors Many former southern sharecroppers migrate to jobs in cities Total Population: 131,820,000 Farm Population: 30,840,000 Farmers 18% of Labor Force Number of Farms: 6,102,000 Average Acres: 175 Irrigated Acres: 17,942,968 Agricultural exports $2.42 billion or 22% of total exports 58% of all farms have cars 25% have phones 33% have electricity 584,000 students enrolled in agricultural courses Increased use of herbicides and pesticides Acreage of crops, such as oats, required for horse and mule feed drop as farms use more tractors Many former southern sharecroppers migrate to jobs in cities

18 Farm Credit in the 1940’s – The Federal Land Banks paid off federal capital

19 Agricultural Legislation of the 1940’s… 1941 – Stegall Agreement provides price support to expand production for non-basic commodities Price controls and food rationing during wartime emergency Agricultural Act incorporates principle of flexible price support and provides change in parity formula International Wheat Program 1941 – Stegall Agreement provides price support to expand production for non-basic commodities Price controls and food rationing during wartime emergency Agricultural Act incorporates principle of flexible price support and provides change in parity formula International Wheat Program

20 The U.S. in the 1950’s… Unemployed: 3,288,000 Car Sales: 6,665,800 Average Annual Salary: $2,992 Labor Force Male/Female: 5/2 Loaf of bread costs $.14 President Harry Truman approves production of the hydrogen bomb Racial segregation ruled unconstitutional by the U.S. Supreme Court The AFL-CIO merged creating an organization with 15 million members The Federal Highway Act is signed in 1956, marking the beginning of work on the interstate highway system The Cold War begins, and the fear of Communism was very powerful in the United States In 1956 Dr. Jonas Salk developed the vaccine for polio Explorer 1, the first U.S. satellite, successfully orbits the earth in 1958 Alaska and Hawaii become the forty-ninth and fiftieth states in 1959 Television changed the way we lived in the 1950's; the hula-hoop, Barbie doll, American Bandstand, “I Love Lucy”, Dr. Seuss, The Ed Sullivan Show, McDonald's hamburgers, Elvis and the “Peanuts” comic strip were all introduced during this decade Unemployed: 3,288,000 Car Sales: 6,665,800 Average Annual Salary: $2,992 Labor Force Male/Female: 5/2 Loaf of bread costs $.14 President Harry Truman approves production of the hydrogen bomb Racial segregation ruled unconstitutional by the U.S. Supreme Court The AFL-CIO merged creating an organization with 15 million members The Federal Highway Act is signed in 1956, marking the beginning of work on the interstate highway system The Cold War begins, and the fear of Communism was very powerful in the United States In 1956 Dr. Jonas Salk developed the vaccine for polio Explorer 1, the first U.S. satellite, successfully orbits the earth in 1958 Alaska and Hawaii become the forty-ninth and fiftieth states in 1959 Television changed the way we lived in the 1950's; the hula-hoop, Barbie doll, American Bandstand, “I Love Lucy”, Dr. Seuss, The Ed Sullivan Show, McDonald's hamburgers, Elvis and the “Peanuts” comic strip were all introduced during this decade

21 Farm Landscape of the 1950’s Total Population: 151,684,000 Farm Population: 25,058,000 Farmers 12.2% of Labor Force Number of Farms: 5,388,000 Average Acres: 216 Irrigated Acres: 25,634,869 Agricultural Exports $3.53 billion or 22% of total exports One farmer supplies food for 15.5 persons Commercial fertilizer used: 22,340,666 tons per year 70.9% of all farms have cars, 49% have phones, 93% have electricity In 1954 the number of tractors on farms exceeds the number of horses and mules for the first time Trucks and barges compete successfully for agricultural products as railroad rates rise Late 50’s – Anhydrous ammonia increasingly used as cheap source of nitrogen, boosting yields Many rural areas lose population as farm family members seek outside work Total Population: 151,684,000 Farm Population: 25,058,000 Farmers 12.2% of Labor Force Number of Farms: 5,388,000 Average Acres: 216 Irrigated Acres: 25,634,869 Agricultural Exports $3.53 billion or 22% of total exports One farmer supplies food for 15.5 persons Commercial fertilizer used: 22,340,666 tons per year 70.9% of all farms have cars, 49% have phones, 93% have electricity In 1954 the number of tractors on farms exceeds the number of horses and mules for the first time Trucks and barges compete successfully for agricultural products as railroad rates rise Late 50’s – Anhydrous ammonia increasingly used as cheap source of nitrogen, boosting yields Many rural areas lose population as farm family members seek outside work

22 Agriculture Legislation of the 1950’s… Agricultural Trade Development and Assistance Act – (Food for Peace) 1956 – Legislation provides for Great Plains Conservation Program Social Security extended to farm operators 1955 – National Farmers Organization Formed Debates about level farm price support and surplus Increased emphasis on rural development and renewal 1957 – Poultry Inspection Act 1958 – Humane Slaughter Act Agricultural Trade Development and Assistance Act – (Food for Peace) 1956 – Legislation provides for Great Plains Conservation Program Social Security extended to farm operators 1955 – National Farmers Organization Formed Debates about level farm price support and surplus Increased emphasis on rural development and renewal 1957 – Poultry Inspection Act 1958 – Humane Slaughter Act

23 The U.S. in the 1960’s… Unemployment: 3,852,000 National Debt: billion Average Annual Salary: $4,743 Minimum wage hits $ auto deaths per 100, million children from post-war baby boom become teenagers and young adults; 850,00 enter college Civil rights movement made great changes in society The Presidential “Commission of the Status of Women” gave birth to the women’s lib movement Respect for authority declined among youth, and crime rates soared to 9 times the rate of the 1950’s President John F Kennedy, after serving less than two years in office, was assassinated in – First man on the moon – Neil Armstrong The Vietnam War begins Unemployment: 3,852,000 National Debt: billion Average Annual Salary: $4,743 Minimum wage hits $ auto deaths per 100, million children from post-war baby boom become teenagers and young adults; 850,00 enter college Civil rights movement made great changes in society The Presidential “Commission of the Status of Women” gave birth to the women’s lib movement Respect for authority declined among youth, and crime rates soared to 9 times the rate of the 1950’s President John F Kennedy, after serving less than two years in office, was assassinated in – First man on the moon – Neil Armstrong The Vietnam War begins

24 Farm Landscape of the 1960’s Total Population: 180,007,000 Farm Population: 15,635,000 Farmers 8.3% of Labor Force Number of Farms: 3,711,000 Average Acres: 303 Irrigated Acres: 33,829,000 One farmer supplies food for 25.8 persons Agricultural exports $5.76 billion or 22.9% of total exports 83% of all farms have phones 98.4% have electricity Financial condition of railroads deteriorate; rail abandonments accelerate; agricultural shipments by cargo planes increase Soybean acreage expands as an alternative to other crops By 1968 – 96% of cotton harvested mechanically Total Population: 180,007,000 Farm Population: 15,635,000 Farmers 8.3% of Labor Force Number of Farms: 3,711,000 Average Acres: 303 Irrigated Acres: 33,829,000 One farmer supplies food for 25.8 persons Agricultural exports $5.76 billion or 22.9% of total exports 83% of all farms have phones 98.4% have electricity Financial condition of railroads deteriorate; rail abandonments accelerate; agricultural shipments by cargo planes increase Soybean acreage expands as an alternative to other crops By 1968 – 96% of cotton harvested mechanically

25 Farm Credit in the 1960’s… PCA’s and Banks for Cooperatives paid off federal capital

26 Agriculture Legislation of the 1960’s… 1961 – Inception of the Peace Corps where volunteers serve their country in the cause of peace by living and working in developing countries 1964 – Trade Expansion Act 1964 – Wilderness Act 1964 – Food Stamp Act 1966 – Federal minimum wage extended to some farm workers The Government uses food surpluses for the needy at home and abroad; State legislation to keep land in farming gains impetus 1961 – Inception of the Peace Corps where volunteers serve their country in the cause of peace by living and working in developing countries 1964 – Trade Expansion Act 1964 – Wilderness Act 1964 – Food Stamp Act 1966 – Federal minimum wage extended to some farm workers The Government uses food surpluses for the needy at home and abroad; State legislation to keep land in farming gains impetus

27 The U.S. in the 1970’s… Unemployment: 4,088,000 National Debt: $382 billion Average Annual Salary: $7,564 Milk: $.33 a quart and bread: $.24 a loaf Major trends in the 60’s continued into the 70’s; a growing disillusionment of government, advances in civil rights, increased influence of the women's movement, a heightened concern for the environment, and increased space exploration The Vietnam War was the longest military conflict in U.S. history beginning in 1969 and not ending until 1975 The Watergate scandal; on August 8, 1974, Richard Nixon becomes the first U.S. president to resign - Vice President Gerald R. Ford will later pardon Nixon of all charges related to the Watergate case 40,000 young people gathered at a rock festival called Woodstock Interest rates climbed to 18% and beyond Unemployment: 4,088,000 National Debt: $382 billion Average Annual Salary: $7,564 Milk: $.33 a quart and bread: $.24 a loaf Major trends in the 60’s continued into the 70’s; a growing disillusionment of government, advances in civil rights, increased influence of the women's movement, a heightened concern for the environment, and increased space exploration The Vietnam War was the longest military conflict in U.S. history beginning in 1969 and not ending until 1975 The Watergate scandal; on August 8, 1974, Richard Nixon becomes the first U.S. president to resign - Vice President Gerald R. Ford will later pardon Nixon of all charges related to the Watergate case 40,000 young people gathered at a rock festival called Woodstock Interest rates climbed to 18% and beyond

28 Farm Landscape of the 1970’s Total Population: 204,335,000 Farm Population: 9,712,000 Farmers 4.6% of Labor Force Number of Farms: 2.780, 000 Average Acres: 390 Agricultural exports $19.8 billion a year or 19% of total exports 7,994 cooperatives with 6.2 million members One farmer supplies food for 47.7 persons 853,000 students enrolled in agricultural courses Farmers organize “tractor-cade” in Washington D.C. as part of the American Agricultural Movement Inflation increases, while economic growth slows 1972 – Russian wheat sale brings higher prices Grain embargo against Soviet Union following invasion of Afghanistan Total Population: 204,335,000 Farm Population: 9,712,000 Farmers 4.6% of Labor Force Number of Farms: 2.780, 000 Average Acres: 390 Agricultural exports $19.8 billion a year or 19% of total exports 7,994 cooperatives with 6.2 million members One farmer supplies food for 47.7 persons 853,000 students enrolled in agricultural courses Farmers organize “tractor-cade” in Washington D.C. as part of the American Agricultural Movement Inflation increases, while economic growth slows 1972 – Russian wheat sale brings higher prices Grain embargo against Soviet Union following invasion of Afghanistan

29 Farm Credit in the 1970’s Farm Credit Act updated the System’s charter, expanded lending authorities, including leasing, rural home lending, and farm related business lending

30 Agriculture Legislation of the 1970’s… 1972 – Rural Development Act 1972 – Clean Water Act 1973 – Agriculture and Consumer Protection Act emphasizes maintaining or increasing instead of controlling production 1972 – Rural Development Act 1972 – Clean Water Act 1973 – Agriculture and Consumer Protection Act emphasizes maintaining or increasing instead of controlling production

31 The U.S. in the 1980’s… National Debt reached $2,000,000,000 Average Annual Salary: $15,757 Minimum Wage: $3.10 Attendance at movies reached 20 million per week The country falls into a recession after all time high interest rates Columbia – the first reusable space shuttle was launched in 1981; in 1986 the space shuttle Challenger exploded, killing 7 astronauts Research money allowed for studies and new treatments in heart, cancer, and DNA Prisons overflowed and violent crimes tripled between 1960 and 1980 Families changed drastically – more divorces, unmarrieds living together and more single parent families Two-earner family was more common; more women earned college degrees, married, and had fewer children National Debt reached $2,000,000,000 Average Annual Salary: $15,757 Minimum Wage: $3.10 Attendance at movies reached 20 million per week The country falls into a recession after all time high interest rates Columbia – the first reusable space shuttle was launched in 1981; in 1986 the space shuttle Challenger exploded, killing 7 astronauts Research money allowed for studies and new treatments in heart, cancer, and DNA Prisons overflowed and violent crimes tripled between 1960 and 1980 Families changed drastically – more divorces, unmarrieds living together and more single parent families Two-earner family was more common; more women earned college degrees, married, and had fewer children

32 Farm Landscape of the 1980’s Total Population: 227,020,000 Farm Population: 6,051,000 Farmers 3.4% of Labor Force Number of Farms: 2,439,510 Average Acres: 426 Irrigated Acres: 50,350,000 90% of all farms have electricity, 98.6% have phones 1981 – Interest rates reach all time high – prime rate 21% Farmland values peak Farmers experienced severe credit problems due to low prices, high interest rates, and high farm expenses - many farms end up in foreclosure 1985 – USDA scientist indicates that agricultural chemicals infiltrate ground water more than previously thought Farmland values bottom out after a 6-year decline, signaling both a turnaround in the farm economy and increased competition with other countries' exports Ethanol technology developed Scientists warn that global warming may affect the future viability of American farming; one of the worst droughts in the Nation's history hits Midwestern farmers Total Population: 227,020,000 Farm Population: 6,051,000 Farmers 3.4% of Labor Force Number of Farms: 2,439,510 Average Acres: 426 Irrigated Acres: 50,350,000 90% of all farms have electricity, 98.6% have phones 1981 – Interest rates reach all time high – prime rate 21% Farmland values peak Farmers experienced severe credit problems due to low prices, high interest rates, and high farm expenses - many farms end up in foreclosure 1985 – USDA scientist indicates that agricultural chemicals infiltrate ground water more than previously thought Farmland values bottom out after a 6-year decline, signaling both a turnaround in the farm economy and increased competition with other countries' exports Ethanol technology developed Scientists warn that global warming may affect the future viability of American farming; one of the worst droughts in the Nation's history hits Midwestern farmers

33 Farm Credit in the 1980’s… Federal Land Bank of Jackson, Mississippi, goes into receivership and is dissolved Legislation allowed for the Farm Credit System to receive financial assistance from the U.S. Treasury and created the Farm Credit Insurance Fund 1988 – Co Bank was created by stockholder vote 1988 – Federal Intermediate Credit Banks and Federal Land Banks merged to create Farm Credit Banks Federal Land Bank of Jackson, Mississippi, goes into receivership and is dissolved Legislation allowed for the Farm Credit System to receive financial assistance from the U.S. Treasury and created the Farm Credit Insurance Fund 1988 – Co Bank was created by stockholder vote 1988 – Federal Intermediate Credit Banks and Federal Land Banks merged to create Farm Credit Banks

34 Agriculture Legislation of the 1980’s… Railroad and trucking deregulated and European grain and animal exports become more competitive with U.S. products 1981 – U.S. Agricultural exports peak at $43.8 billion, then decline in 1987; President Reagan lifts the embargo against the Soviet Union 1983 – USDA implements a payment in kind program, resulting in the third largest acreage reduction ever 1988 – The U.S. – Canada trade accord initiates free trade in all commodities Railroad and trucking deregulated and European grain and animal exports become more competitive with U.S. products 1981 – U.S. Agricultural exports peak at $43.8 billion, then decline in 1987; President Reagan lifts the embargo against the Soviet Union 1983 – USDA implements a payment in kind program, resulting in the third largest acreage reduction ever 1988 – The U.S. – Canada trade accord initiates free trade in all commodities

35 The U.S. in the 1990’s… The Hubble telescope was sent to take pictures of planets and other space objects 1991 – The collapse of the Soviet Union 1993 – World Trade Center bombed 1993 – Use of Internet grows and Net.com stocks take off 1996 – Mad cow disease hits Britain Scientists clone sheep At midnight on December 31, 1999, the world held their breath to see if the Y2K bug would crash the world’s computer systems The Hubble telescope was sent to take pictures of planets and other space objects 1991 – The collapse of the Soviet Union 1993 – World Trade Center bombed 1993 – Use of Internet grows and Net.com stocks take off 1996 – Mad cow disease hits Britain Scientists clone sheep At midnight on December 31, 1999, the world held their breath to see if the Y2K bug would crash the world’s computer systems

36 Farm Landscape of the 1990’s Total Population: 261,423,000 Farm Population: 2,987,552 Farmers 2.6% of labor force Number of Farms: 2,143,150 Average Acres: 461; irrigated acres: 49,404,000 Net farm income reaches a record $54.9 billion Agricultural exports set record at $60.4 billion 1990 – Rural counties gain population after losing ground in the 1980’s Concentration grows in farm inputs industry and among processors and shippers; more farms turn to production and marketing contracts, increasing vertical integration Biotechnology brings important new developments in dairy, corn, and other commodities; genetically engineered crops and livestock appear Hog prices hit depression era low of 8 cents Major livestock consolidation, livestock waste becomes a major issue Tobacco industry settles lawsuits; aid proposed to tobacco farmers USDA meat inspection programs modernized in response to food safety Total Population: 261,423,000 Farm Population: 2,987,552 Farmers 2.6% of labor force Number of Farms: 2,143,150 Average Acres: 461; irrigated acres: 49,404,000 Net farm income reaches a record $54.9 billion Agricultural exports set record at $60.4 billion 1990 – Rural counties gain population after losing ground in the 1980’s Concentration grows in farm inputs industry and among processors and shippers; more farms turn to production and marketing contracts, increasing vertical integration Biotechnology brings important new developments in dairy, corn, and other commodities; genetically engineered crops and livestock appear Hog prices hit depression era low of 8 cents Major livestock consolidation, livestock waste becomes a major issue Tobacco industry settles lawsuits; aid proposed to tobacco farmers USDA meat inspection programs modernized in response to food safety

37 Farm Credit in the 1990’s… Federal financial assistance to the Farm Credit System was defused (full payment of principal, 11 years ahead of schedule) 1992 – AgriBank formed by the consolidation of the Farm Credit Banks of St. Paul and St. Louis Farm Credit Bank of Louisville merged into AgriBank AgAmerica formed by the consolidation of the Farm Credit Banks of Omaha and Spokane AgFirst Farm Credit Bank formed by the consolidation of the Farm Credit Banks to Baltimore and Columbia AgAmerica, FCB, and Western Farm Credit Bank under joint management 1998 – FCA Philosophy Statement Introduced 1999 – CoBank and St. Paul Bank for Cooperatives merged Federal financial assistance to the Farm Credit System was defused (full payment of principal, 11 years ahead of schedule) 1992 – AgriBank formed by the consolidation of the Farm Credit Banks of St. Paul and St. Louis Farm Credit Bank of Louisville merged into AgriBank AgAmerica formed by the consolidation of the Farm Credit Banks of Omaha and Spokane AgFirst Farm Credit Bank formed by the consolidation of the Farm Credit Banks to Baltimore and Columbia AgAmerica, FCB, and Western Farm Credit Bank under joint management 1998 – FCA Philosophy Statement Introduced 1999 – CoBank and St. Paul Bank for Cooperatives merged

38 Agriculture Legislation of the 1990’s… The Federal Agriculture Improvement & Reform Act of 1996, a milestone in U.S. agricultural policy, provides new farm sector law for , fundamentally redesigning income support programs & discontinuing supply management programs for producers of many commodities New Act’s focus is on market orientation and global trade The Federal Agriculture Improvement & Reform Act of 1996, a milestone in U.S. agricultural policy, provides new farm sector law for , fundamentally redesigning income support programs & discontinuing supply management programs for producers of many commodities New Act’s focus is on market orientation and global trade

39 The U.S. in the 2000’s… The National Debt reaches record high of $8.352 trillion The 2000 Bush – Gore Presidential Election caused much controversy as the results were extremely close The rising deficit, the viability of Social Security & Medicare, and rising health care costs are major political issues HIV/Aids become a major health care focus September 11, 2001, attacks (often referred to as 9/11) were a series of coordinated terrorist attacks upon the USA; approximately 3,000 people died in the attacks The Department of Homeland Security was created to fight terrorism The Sarbanes-Oxley Act (SOX) of 2002 came as a result of the large corporate financial scandals involving Enron, WorldCom, etc. The 2003 invasion of Iraq, termed "Operation Iraqi Freedom" by the US administration, began on March 20 th High gasoline and oil prices are a major concern in the U.S. - national average gasoline price per gallon ($2.90 on April 23) approaches the record high of $3.21 per gallon set in 1981 (adjusted for inflation) The National Debt reaches record high of $8.352 trillion The 2000 Bush – Gore Presidential Election caused much controversy as the results were extremely close The rising deficit, the viability of Social Security & Medicare, and rising health care costs are major political issues HIV/Aids become a major health care focus September 11, 2001, attacks (often referred to as 9/11) were a series of coordinated terrorist attacks upon the USA; approximately 3,000 people died in the attacks The Department of Homeland Security was created to fight terrorism The Sarbanes-Oxley Act (SOX) of 2002 came as a result of the large corporate financial scandals involving Enron, WorldCom, etc. The 2003 invasion of Iraq, termed "Operation Iraqi Freedom" by the US administration, began on March 20 th High gasoline and oil prices are a major concern in the U.S. - national average gasoline price per gallon ($2.90 on April 23) approaches the record high of $3.21 per gallon set in 1981 (adjusted for inflation)

40 Farm Landscape of the 2000’s Total Population: 296,410,404 in 2005 Farm Population: 951,810 Farmers.73% of Labor Force Number of Farms: 2,113,470 Average Acres: 441 Net farm income reaches a record $82.5 billion in 2004 Agricultural exports set record at $62.4 billion U.S. policy provides incentives for ethanol production BSE – Mad Cow disease hit U.S. December 2003 Biotechnology made genetically engineered crops possible The presence of soybean rust appears in U.S. November 2004 Total Population: 296,410,404 in 2005 Farm Population: 951,810 Farmers.73% of Labor Force Number of Farms: 2,113,470 Average Acres: 441 Net farm income reaches a record $82.5 billion in 2004 Agricultural exports set record at $62.4 billion U.S. policy provides incentives for ethanol production BSE – Mad Cow disease hit U.S. December 2003 Biotechnology made genetically engineered crops possible The presence of soybean rust appears in U.S. November 2004

41 Farm Credit in the 2000’s… AgAmerica (Omaha) merger with AgriBank, FCB Mission Related Investments (MRI) authority clarified AgAmerica (Omaha) merger with AgriBank, FCB Mission Related Investments (MRI) authority clarified

42 Agriculture Legislation of the 2000’s… The 2002 Farm Act was signed into law by the President on May 13, 2002 Production flexibility contract payments are replaced by direct payments The marketing loan program is retained, although loan rates were adjusted Loan rates for wheat and feed grains were increased and the loan rate for soybeans was reduced A new counter-cyclical payment is established to provide an improved farm income safety net for producers of wheat, feed grains, rice, cotton, and oilseeds Additional commodity program changes were made for dairy, sugar, and peanuts The 2002 Farm Act was signed into law by the President on May 13, 2002 Production flexibility contract payments are replaced by direct payments The marketing loan program is retained, although loan rates were adjusted Loan rates for wheat and feed grains were increased and the loan rate for soybeans was reduced A new counter-cyclical payment is established to provide an improved farm income safety net for producers of wheat, feed grains, rice, cotton, and oilseeds Additional commodity program changes were made for dairy, sugar, and peanuts

43 Moving Forward…

44 HORIZONS – Three Phases: Assess the Marketplace Reach Consensus on Desired Changes Implementation Assess the Marketplace Reach Consensus on Desired Changes Implementation

45 Premise of the Marketplace Assessment: Our Mission Is Not Changing To help maintain the quality of life in rural America and on the farm through constant commitment to competitive lending, expert financial services and advice, and a feeling of partnership with its customers

46 Key Question: What changes to Farm Credit’s authorities are essential to maintaining the quality of life in rural America?

47 Enhance the ability of the System to serve the funding and service needs of all farmers, both full and part time Provide the System with greater ability to serve agriculturally related businesses Allow the System to invest in rural America consistent with its mission Expand partnering with banks and others to finance similar entities and other ag businesses Enhance ability to finance rural homes Enhance the ability of the System to serve the funding and service needs of all farmers, both full and part time Provide the System with greater ability to serve agriculturally related businesses Allow the System to invest in rural America consistent with its mission Expand partnering with banks and others to finance similar entities and other ag businesses Enhance ability to finance rural homes Summary of the 23 Recommendations…

48 Bright future for the System Expands the market for our associations and their need for products and services from AgriBank Requires our support and expertise Bright future for the System Expands the market for our associations and their need for products and services from AgriBank Requires our support and expertise Effect on AgriBank and Employees?


Download ppt "The 90th Anniversary of the Farm Credit System HOW FARM CREDIT CAME TO BE..."

Similar presentations


Ads by Google