Our history is a long one, beginning nearly a
century ago. In many ways, it is also the history
of agriculture and rural America.
In the early 1900s, commercial lenders considered agriculture to
be a large risk. Interest rates were high, and long-term financing
for farmers and ranchers was scarce. President Theodore
Roosevelt appointed a Country Life Commission in 1908 to
address the problems facing a predominantly rural population.
Congress Sets Up
Land Bank Cooperatives
After congressional and presidential studies, Congress passed
the Federal Farm Loan Act in 1916, establishing the nationwide
Farm Credit System — a network of credit cooperatives — to
be a reliable source of funding for farmers, ranchers and aquatic
producers during good times and bad. This system was based
largely on Germany’s Landschafts, which had operated since
1769 and appeared to be the most successful of the European
cooperative agricultural credit systems.
The legislation set up 12 district banks across the country to
provide funds to local mortgage lending cooperatives, which
would be owned by farmers and ranchers. One of these banks, the
Federal Land Bank of Houston, was designated to serve the Tenth
Farm Credit District and later would become the Farm Credit
Bank of Texas.
Following World War I, a prosperous time for farmers, prices
collapsed, resulting in a shortage of short-term credit for farmers and
ranchers. Congress responded with the Agricultural Credit Act of
1923, which added 12 Federal Intermediate Credit Banks (FICBs),
including the FICB of Houston, to the Farm Credit System.
Production Lending Co-ops Born of the Depression
The stock market crash of 1929 touched off the Great Depression, throwing thousands of farmers into bankruptcy and strangling the Farm Credit System’s ability to finance agriculture. In 1933, Congress passed two laws affecting the future of Farm Credit.
One piece of legislation re-capitalized the Land Banks with
$189 million. The other revamped the FICBs and established a short-term credit delivery system through locally owned Production Credit Associations. In addition, President Franklin Roosevelt consolidated the supervision of all federal agricultural credit agencies under a new regulator, the Farm Credit Administration.
As producers discovered the benefits of doing business with
a financing cooperative that they owned — and that truly
cared about their success — Farm Credit became the trusted
financial partner of generations of rural Americans. By 1968,
all of the Farm Credit System lending entities had repaid
their federal capital debt and were completely owned by their
customers.
Today, agriculture requires enormous amounts of capital.
Technology has revolutionized farming and agribusiness. Yet,
Farm Credit has continued to rise to the challenge of providing
sound, dependable credit to agriculture and rural America.
Part of the Fabric of Rural America
The cooperative credit system envisioned by Congress has
stood the test of time. Since 1916, the Farm Credit System
has pursued a mission to maintain the quality of life in rural
America by ensuring the availability of sound, dependable
funding for agricultural producers, agribusiness, rural homeowners
and other rural landowners.
Today, the Farm Credit Bank of Texas and its affiliated lending
cooperatives, including Louisiana Land Bank, remain an
important part of the fabric of rural America and a partner to
the nation’s agricultural sector. Together, we are a leader in
rural financing, offering competitive loan products, financial
services and specialized lending expertise. |
