The Financial Infrastructure surrounding Agriculture has experienced long term profound changes recently. In most of the world’s economies, it is now common to consider traditional farming or ranching as staging a complex food and fiber system. Other important stages include the Acquisition of basic inputs by producers, including the marketing, manufacturing, or processing of agricultural commodities. Within this process, there is packaging and delivery of finished food products, related goods, and services to worldwide consumers. How these stages are linked together, owned, controlled and financed are critical components key to agricultural financiers.
Agricultural Financial institutions and markets have become part of the general landscape of financial markets. In The United States, The Farm Credit System, Commercial Banks, Agribusinesses, Public Credit Programs, and other Federally Regulated Lenders have adopted new levels of financial analysis, credit risk assessment, information sharing, performance monitoring in conjunction with building sound lender-borrower relationships.
The Institutional management of credit, operational, and market risk together with determining the levels of economic capital required to withstand such risk have become standardized to a very conservative model so consequently Agricultural Businesses have been at the mercy of The Major Components of The Farm Credit System.
All American Agricultural businesses play by the rules of Farm Credit Leasing Services Corporation, Federal Farm Credit Banks Funding Corporation, Federal Agricultural Mortgage Corporation, Farm Credit Financial Assistance Corporation, The Farm Credit Council, Farm Credit Administration, Farm Credit Banks, Federal Land Credit Associations, Agricultural Credit Associations, Farmer, Rancher, and Rural Homeowner Stockholders or Borrowers, CoBank National Bank for Cooperatives, and Cooperative Stockholders. However, since the recession in 2008 those funding sources coupled with dropping commodity prices and rising interest rates have lead farmers to seek alternative funding sources.
In Essence as depicted above, once can observe core deposits on a decline yet federal borrowing accelerating. The only logical way to diffuse this would be to raise interest rates on the Treasury Bill which as of 2018, The Federal Reserve has announced this to increase foreign investment into the USA, the problem for farmers or agricultural businesses who has loans with their banks and meeting their obligations is now they have to pay higher interest rates because banks adjust their rates according to fiscal and monetary policy, therefore lowering profit margins further while the commodity market is last for the market correction of prices being adjusted upwards. Enter Agrilend. Right now it is imperative for farmers, ranchers, and agribusiness to seek alternative private foreign investment capital and that is what Agrilend Members are provided. For more information, please email me at firstname.lastname@example.org or apply online at www.agrilend.co on becoming a member.