About the Farm Credit System

The Farm Credit System has its origins in the credit crunch of the early twentieth century, when farmers across the United States found that their operations were threatened by insufficient access to short- and long-term loans. Farmers, farm editors, and bankers from throughout the countryside called for a new system of agricultural credit agencies, that would facilitate the expansion of credit to those who needed it most. After Congress and Presidents William Howard Taft and Woodrow Wilson echoed these calls for agricultural credit, the nation sent a series of commissions to Europe to study French and German cooperatives that served the credit needs of farmers. These commissions returned with proposals for a new, American system of cooperative credit, which was created by the Federal Farm Loan Act of 17 July 1916 (also known as the Hollis-Bulkley Bill).

The 1916 legislation created a dozen federal Land Banks, which were placed across the country to help coordinate the distribution of credit to American farmers, and it represents the beginning of the long and complex history of federal involvement in rural credit. Since 1916 the Farm Credit System has evolved considerably, to include commodity-oriented Production Credit Associations, Banks for Cooperatives, and banks to coordinate short-term credit to farmers, first known as the Federal Intermediate Credit Banks. All of these institutions serve farm operators and rural businesses, and they have smoothed the course of agricultural development over the past ninety-two years, and will continue to do so long into the future.

Today the Farm Credit System funds farms, forestry, fisheries, rural development, and alternative energy, and represents generations of stability as well as the cutting edge in rural finance.