Remarks by

The Honorable Jill Long Thompson

Board Chair and CEO, Farm Credit Administration

FCA Symposium on System Consolidation 

January 16, 2014

Good morning! It is my privilege to welcome you to the first session of Farm Credit 

Administration’s Symposium on Consolidation in the Farm Credit System.

Twenty years ago, there were 9 banks in the Farm Credit System and well over 200 directlending institutions. Today, the System has 4 banks and 78 direct-lending institutions.

And the consolidation shows no signs of stopping. In the past year, the total number of 

associations dropped by four.

As the independent, arm’s-length regulator of the System, FCA must approve all merger 

applications. The purpose of this symposium is to ensure that we—the Board and management 

of FCA—ask the right questions when we consider merger requests. I want to make sure that 

we understand all implications of a proposed merger—the benefits, as well as any potential 

pitfalls. 

We must, of course, consider the financial implications of a merger, and we do. We consider the 

impact to the institutions and borrower-shareholders involved in any given merger, and we 

consider the financial impact on the System as a whole. 

But consolidation can affect far more than financial condition of the merged institution. Mergers 

can provide economies of scale that help institutions provide greater outreach and technical 

assistance to eligible and creditworthy borrowers. The right kinds of mergers have proven to 

benefit agriculture across the country.

Because the System is a Government-sponsored enterprise, it has a higher purpose than 

merely ensuring its financial health. According to the Farm Credit Act, the purpose of the 

System is to “improve the income and well-being of American farmers and ranchers by 

furnishing sound, adequate, and constructive credit and closely related services.” 

Toward that end, in the Agricultural Credit Act of 1987, Congress actually directed the System to 

consolidate, in order to strengthen the System. And it has worked. The question for us is: when 

we evaluate a proposed merger, what all must we take into consideration to ensure the mission 

is fulfilled?

I believe that the panelists we will hear from today, as well as the panelists for the February 

session, will help us better understand the myriad ways consolidation can affect the System’s 

mission. It can also help us understand how the structure of a merger can affect the mission.
I thank our panelists now, in advance, for their willingness to help us think through these issues. 

I also thank staff, particularly our Chief Economist Steve Gabriel, for their hard work in 

organizing this symposium. And thank all of you in the audience for coming out today to 

participate in this symposium.

Finally, I thank the participants from the System. The relationship between a regulator and a 

regulated entity can at times feel adversarial. I applaud your willingness to join us today and to 

take advantage of an opportunity to contribute to the information gathering regarding the 

implications of System consolidation. In the end, I believe that FCA and the System want the 

very same things—to meet the credit needs of America’s farmers and ranchers and to do so 

safely and soundly.