A large, complex government-sponsored enterprise
Congress created the Farm Credit System in 1916 to serve the needs of small family farmers and ranchers. With help from its benefactors in Congress and its regulator, the Farm Credit Administration, the FCS has grown dramatically.
The FCS is organized as a cooperative and has a nationwide presence, operating approximately 82 institutions with thousands of retail offices. Many of these institutions are multibillion-dollar companies in their own right. The FCS is a large, complex Government-Sponsored Enterprise that competes directly with banks for farm, ranch, home mortgage, agribusiness, consumer, energy and cooperative loans.
The Farm Credit System has had significant earnings, but paid very little taxes. For example, in 2011, its assets were $230 billion and it had earnings of more than $3.9 billion, but it only paid an effective tax rate of 6.4 percent. In contrast, in 2011, the banking industry paid an effective income tax rate of 29.6 percent.
Prior to the 1987 Farm Credit Act, the Farm Credit Administration acted as the lobbyist, regulator and general trade association of the FCS. Despite being separated, the FCS and the FCA continue to enjoy a cozy relationship to this day.