A federal agency that issues note and bond debt securities on behalf of the 105 member banks that make up the federal farm credit banks. Unlike commercial banks, farm credit banks don’t accept deposits. Instead, the funds for loans come from the issuance of notes and debt by the Federal Farm Credit Banks Funding Corp. The money raised is used to benefit domestic agricultural producers and cooperatives by creating a source of funds for loans. The Farm Credit System meets approximately one-third of the credit needs of U.S. agricultural producers.
The Farm Credit System is a nationwide network of borrower-owned lending institutions and affiliated service entities that make loans to agricultural companies. It is the oldest government-sponsored enterprise (GSE), and was created by Congress in 1916. The system institutions are federally chartered under the Farm Credit Act and are subject to supervision, examination, and regulation by a Federal agency, the Farm Credit Administration. The Farm Credit Debt Securities are the joint and several obligations of the System Banks. In the late 1980s the Farm Credit System Insurance Corp. was created. It is an independent U.S. government-controlled corporation that insures the debt securities to the extent that funds are available.