VIDEO: Farm Credit Boards of Directors - Who They Are, How They Are Comprised, and What They Do

David Gossett, Nexsen Pruet attorney and Agribusiness Team Leader, talks about Farm Credit Boards of Directors, who they are, how they are comprised, and what their duties are.

Farm Credit System is distinguished from other financial institutions in a lot of ways. Let me talk with you a little about their history. The System was created in 1917 when Congress enacted a law which was the original version of the Farm Credit Act. The reason for the creation of the Farm Credit System was that then, as now, traditional sources of capital were not always available for agriculture. The overarching principle of Congress was to create a system throughout the United States to be dedicated to the support of agriculture through good and bad times. And, of course, within the agricultural industry, bad times are often represented by floods, droughts, disease, and especially by market volatility, for example, when there is too much of one commodity and it floods the market or too little in another, market pricing can be affected. Congress wisely chose a structure for the Farm Credit System to be markedly different from traditional investor-owned banks whose goal is to maximize return on investments for their stockholders. Instead Congress chose a cooperative model. Every institution in the Farm Credit System is a cooperative which means that its stockholders are farmers, ranchers and agri-businesses and producers and harvesters of aquatic products who borrow from their institutions.

VIDEO: Farm Credit Boards of Directors - Who They Are, How They Are Comprised, and What They Do

David Gossett, Nexsen Pruet attorney and Agribusiness Team Leader, talks about Farm Credit Boards of Directors, who they are, how they are comprised, and what their duties are.

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