Farm Credit Administration

Fiscal Year 2022 Proposed Budget

and Performance Plan

Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table of Contents

Part I Fiscal Year 2022 Proposed Budget................................................................................ 1

Fiscal Year 2022 Budget Overview................................................................................................. 3

Budget Trends................................................................................................................................. 8

Assessments...................................................................................................................................12

Part II Farm Credit Administration....................................................................................... 15

Profile of the Farm Credit Administration .................................................................................... 17

FCA Internal Operations............................................................................................................... 20

Ensuring Safety and Soundness ................................................................................................... 30

Developing Regulations and Policies.............................................................................................37

Part III Farm Credit System.................................................................................................. 43

Profile of the Farm Credit System .................................................................................................45

Financial Condition and Performance.......................................................................................... 49

Young, Beginning, and Small Farmers and Ranchers .................................................................. 60

Market Share of Farm Debt.......................................................................................................... 63

Part IV Performance Budget FY 2022 .................................................................................. 65

Performance Budget Overview ......................................................................................................67

Desired Outcomes for Strategic Goals .......................................................................................... 69

Performance Measurement and Reporting ...................................................................................75
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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List of Tables 

Table 1. Farm Credit Administration FY 2022 proposed budget................................................... 3

Table 2. Information resource management plan initiatives ......................................................... 6

Table 3. FCA budgets, FYs 2020 – 2022 ........................................................................................ 9

Table 4. FCA actions and resulting impact....................................................................................10

Table 5. Budgeted sources of FCA revenue and funding, FYs 2020 – 2022 ................................. 11

Table 6. FCS assessments, FYs 2012 – 2021 .................................................................................12

Table 7. FCA funding, obligations, and assessment carryover, FYs 2019 and 2020 (in millions) 13

Table 8. FCA’s net cost to System borrowers, FYs 2012 – 2021....................................................14

Table 9. Farmer Mac assessments, FYs 2012 – 2021 ....................................................................14

Table 10. Full-time-equivalent staffing levels, FYs 2012 – 2022 ..................................................21

Table 11. FCA retirement eligibility, FYs 2020 – 2025................................................................. 22

Table 12. FYs 2020 and 2021 locality rates ...................................................................................25

Table 13. Shared services, FY 2021 ................................................................................................25

Table 14. Competitive consulting service contracts of more than $25,000, FY 2020 ................. 26

Table 15. Competitive consulting service contracts of more than $25,000, FY 2021 ...................27

Table data for figure 2................................................................................................................... 34

Table 16. Net income (dollars in millions).................................................................................... 50

Table 17. Interest margin in annualized percentages ....................................................................51

Table 18. Profitability across System districts for the first nine months of year...........................51

Table 19. Gross loan growth by district and Systemwide (dollars in millions).............................52

Table data for figure 4....................................................................................................................53

Table 20. FCS investments (dollars in millions) ...........................................................................54

Table 21. FCS loan quality..............................................................................................................55

Table 22. Systemwide debt (dollars in millions) ...........................................................................56

Table 23. FCS capital composition (dollars in millions) ...............................................................57

Table 24. Regulatory capital ratios of FCS banks ......................................................................... 58

Table 25. YBS loans made during 2019 (as of December 31, 2019) ............................................. 62

Table 26. YBS loans outstanding (as of December 31, 2019) ....................................................... 63

Table 27. FCA performance budget, FYs 2020 – 2022 .................................................................67

Table 28. FY 2022 proposed budget and full-time equivalents for program activities................ 68
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 29. Desired outcomes for strategic goals ............................................................................ 69

Table 30. Goal 1 — Performance measures ................................................................................... 71

Table 31. Budgets to achieve goal 1................................................................................................ 71

Table 32. Goal 2 — Performance measures ...................................................................................73

Table 33. Budgets to achieve goal 2...............................................................................................73

Table 34. Goal 3 — Performance measures ...................................................................................74

List of Figures

Figure 1. FCA organizational chart as of January 2021 ................................................................ 20

Figure 2. Farm Credit System Financial Institution Rating System (FIRS) composite ratings... 33

Figure 3. The chartered territories of Farm Credit System banks as of January 1, 2021 ............. 46

Figure 4. Year-over-year percent change in System assets, September 2010 – 2020 ..................52
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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List of Acronyms and Abbreviations

ACA ...........................................agricultural credit association 

CAMELS ...................................capital, assets, management, earnings, liquidity, and sensitivity 

Farm Credit Act.........................Farm Credit Act of 1971, as amended 

Farmer Mac...............................Federal Agricultural Mortgage Corporation 

FCA............................................Farm Credit Administration 

FCS or System...........................Farm Credit System 

FCSIC........................................Farm Credit System Insurance Corporation 

FIRREA.....................................Financial Institutions Reform, Recovery, and Enforcement Act

FIRS ..........................................Financial Institution Rating System 

FLCA .........................................Federal land credit association 

FTE............................................full-time equivalent 

FTP............................................full-time permanent 

FY..............................................fiscal year

Funding Corporation ................Federal Farm Credit Banks Funding Corporation 

GSE ...........................................government-sponsored enterprise 

IT...............................................information technology 

NCB...........................................National Consumer Cooperative Bank 

OSMO........................................Office of Secondary Market Oversight 

PCA ...........................................production credit association 

RBC ...........................................risk-based capital 

USDA ........................................U.S. Department of Agriculture 

YBS............................................young, beginning, and small (farmers and ranchers)
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Preface

The Farm Credit Administration is an independent agency in the executive branch of the U.S. 

government. We are responsible for regulating and examining the banks, associations, and 

related entities that constitute what is known as the Farm Credit System (FCS or System), 

including the Federal Agricultural Mortgage Corporation (Farmer Mac).1

Created by an executive order of the president in 1933, FCA now derives its powers and 

authorities primarily from the Farm Credit Act of 1971, as amended. We promulgate regulations 

to implement the act, and we examine System institutions for compliance with the act and 

regulations, and with safe and sound banking practices. Our mission is to ensure that System 

institutions and Farmer Mac are safe, sound, and dependable sources of credit and related 

services for all creditworthy and eligible persons in agriculture and rural America.

This document presents and justifies our proposed budget for fiscal year 2022 (Part I). It 

discusses our functions and program activities (Part II) and presents an overview of the 

financial condition of the FCS and Farmer Mac (Part III). Also included is the fiscal year 2022

performance budget, which ties proposed expenditures to the goals and objectives in our 

strategic plan (Part IV).

1 Although Farmer Mac is an FCS institution under the Farm Credit Act (12 U.S.C. 2279aa-1(a)(2)), we 

often discuss Farmer Mac separately from the other entities of the FCS because of the secondary market 

authorities unique to Farmer Mac. Therefore, when we refer to FCS or System institutions without 

specifically including Farmer Mac, Farmer Mac should be considered excluded in that context. Farmer 

Mac is not jointly and severally liable on debt issuances with other parts of the System.

Part I

Fiscal Year 2022

Proposed Budget

_______________________________________________________________

Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Fiscal Year 2022 Budget Overview

Our FY 2022 proposed budget, as shown in table 1, includes $84.2 million in assessments 

(current year and carryover funds) from FCS institutions, including Farmer Mac. Reimbursable 

funding from the U.S. Department of Agriculture and Farm Credit System Insurance 

Corporation adds $520,000 to this amount, bringing our total proposed FCA budget to $84.72 

million.

Table 1. Farm Credit Administration FY 2022 proposed budget

Description Amount proposed

Percentage of 

total budget

Full-time-permanent personnel (FTP) $50,523,065 59.6

Other than FTP 502,784 0.6

Other personnel compensation 438,331 0.5

Total personnel compensation $51,464,180 60.7

Personnel benefits 21,961,806 26.0

Total compensation and benefits $73,425,986 86.7

Travel and transportation of persons 3,317,732 3.9

Transportation of things 65,346 0.1

Rent, communications, and utilities 966,292 1.1

Printing and reproduction 145,594 0.2

Consulting and other services 4,617,073 5.4

Supplies and materials 1,186,077 1.4

Equipment 995,900 1.2

Total budget $84,720,000 100.0

Note: Obligations for administrative expenses in FY 2022 are not to exceed the amount collected in assessments (current and 

prior year) from the FCS and Farmer Mac ($84,200,000). The total budget includes an additional $520,000 from anticipated 

reimbursable activity.

The FY 2022 proposed budget of $84.72 million increased by $3.85 million over the FY 2021 

revised budget of $80.87 million. 

We have leveraged technology and continually emphasized savings and efficiencies in operations 

to keep our costs reasonable. As a result, we present a prudent, cost-effective budget.
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The budget provides resources for three general purposes: 

• To support the System's mission as a dependable source of credit and related services for 

agriculture and rural America

• To develop regulations and policy positions that implement statutes

• To promote the safety and soundness of the FCS

The FY 2022 budget is necessary to maintain an effective examination program. A robust 

examination program will help us identify any emerging risks early so that we can better protect 

the safety and soundness of the System and Farmer Mac. The environment in which the FCS 

operates is dynamic and increasingly complex. 

The budget continues to implement the FCA board’s philosophy on risk-based examination. We 

have included sufficient resources to ensure that risks are properly identified, managed, and 

controlled. These resources will enable us to send our examiners to the institutions we regulate 

to perform on-site testing of the institutions’ credit reviews, internal audits, and internal 

controls. In addition, we will continue to invest in IT modeling applications to help us identify 

risk throughout the System. The budget also includes resources to hire contractors when we 

need technical specialists and technology upgrades. For more information about our risk-based 

examination and supervision, see page 31.

In the FY 2022 proposed budget, the full-time-equivalent (FTE) staffing level increases slightly. 

The FY 2022 budget anticipates increases in spending for salaries and benefits because of 

career-ladder promotions, benefit increases, career progressions, FTE increases, funded leave, 

relocations, resources dedicated to addressing the risk posed by the COVID-19 pandemic, and 

equipment lifecycle replacements. 

As an agency covered by the Financial Institutions Reform, Recovery, and Enforcement Act 

(FIRREA) of 1989, we must also strive to achieve comparability in compensation and benefit 

programs with other agencies covered under the act. Therefore, the budget includes a significant 

investment in strategic and tactical human capital initiatives to continue the efforts begun in the 

previous year. 

In FY 2020, we focused heavily on responding to COVID-19 and its implications for our 

workforce; this work continues in FY 2021. In addition, we are prioritizing our efforts to build 

critical skills and competencies and to optimize our current and future leadership bench. With 

approximately 36% of our workforce eligible to retire by FY 2025, we continue investing in 

programs to sustain an engaged, results-oriented agency culture. 
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Knowledge transfer is particularly important to us. We provide developmental opportunities for 

supervisors and managers to enhance their leadership skills. We are working to ensure we have 

the right people in the right places working on the right things in the right ways. We are 

enhancing our onboarding experience for new hires to deepen organizational commitment and 

foster a sense of belonging early in their careers. We are continuously updating our technical 

training to leverage technology and improve our processes. Our budget supports our continued 

investment in our employees and maintains compensation comparability with the other 

FIRREA agencies. 

We are also investing in resources to support data and analytics. We established an Office of 

Data Analytics and Economics in late 2019, which is led by our chief data officer. We created this 

office by transferring staff and funds from other agency offices. The new office is dedicated to 

working with System institutions to improve the quality of the data we receive from them. The 

office provides analytic tools to improve the agency’s effectiveness and efficiency. At the same 

time, we’re investing in graduate-level courses that will give employees the skills they need to 

use these tools. We expect this to provide several benefits: more effective examination processes, 

better-informed regulatory activity, improved risk identification, and effective organization 

performance measures.

The FY 2022 budget is also necessary to meet our agency’s IT needs for cybersecurity 

enhancements, data efficiencies, application development, and infrastructure maintenance. As 

the complexities of our IT networks, servers, and equipment needs increase, so does the need for

funding to address these complexities. Our budget also helps us to continue to respond to new 

or updated IT-related federal mandates, which often require resources to ensure compliance. 

As part of our overall information resources management (IRM) program, we maintain a strong 

capital planning and investment control process. Our Office of Information Technology invites 

FCA operating units to submit proposals for information technology projects at any time. Our IT 

staff also holds partnership meetings throughout the year with staff from each operating unit to 

discuss the projects. These discussions define the priority, urgency, and scope of each project. 

The project review process considers cost, risk, anticipated return, and alignment with and 

impact on FCA’s agencywide IT systems.

The chief information officer may reprioritize IRM initiatives during the year to accommodate 

changing business needs. The following table shows current IT initiatives and their links to 

FCA’s strategic goals. These initiatives enhance our ability to perform essential functions.

The IRM plan initiatives listed in table 2 are multiyear efforts that apply to numerous FCA 

projects. Rather than simply maintaining operations, these projects are designed to improve the 

agency’s work processes.
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Table 2. Information resource management plan initiatives

Initiative Regulation 

and policy

Safety and 

soundness

Staff 

development Distributed*

Mission tools and approach X

Data management X

Development 

operations/process 

automation

X

Technology platforms X

Information security and

compliance X

Office of Information 

Technology management X

Customer support X

*Distributed means that the initiative supports all three of the agency’s strategic goals (regulation and policy, safety and 

soundness, and staff development). 

Budget approach

We expect the FCS to continue to evolve in the coming years to meet the demands of an 

increasingly complex marketplace for agriculture and rural America. As FCS institutions grow 

and change, their operations become more complex. We expect mergers and consolidations to 

continue. 

To fulfill our mission and respond to the changing conditions in the FCS, our budget strategy 

will involve leveraging our most valuable investment — our people. It will enable us to continue 

to streamline and improve operations and to enhance staff expertise to meet challenges and 

opportunities that may arise. Our budget strategy will also support our IT needs, allowing us to 

acquire and maintain the infrastructure we need and to protect our data against the growing 

number of cyberthreats.

FCA program areas

The agency has two primary programs: (1) policy and regulation and (2) safety and soundness. 

All FCA office activities support these programs directly or indirectly.
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The policy and regulation program

The budget provides resources for administering the agency’s policy and regulation program. 

This program involves developing regulations and policy positions that implement applicable 

statutes, promote the safety and soundness of the FCS, and support the System's mission as a

dependable source of credit and related services for agriculture and rural America.

In addition, the budget provides for ongoing activities such as evaluating and recommending 

regulatory and funding approvals, managing merger and chartering activities, and providing 

strategic and systemic policy research and analyses of risks and other issues facing the System. 

The budget also provides for support activities, including communication of the agency’s 

position on issues, and training and development for staff. In total, policy and regulation 

activities account for approximately $18.7 million, including 58.31 FTEs, in the proposed FY 

2022 budget (see table 28 on page 68).

The safety and soundness program

The budget provides resources for administering the agency’s safety and soundness program. 

The budget resources provided through this program also ensure that FCS institutions comply 

with applicable laws and regulations and are financially positioned to meet the needs of 

agriculture and rural America.

The budget continues to implement the FCA board’s philosophy of a risk-based approach to 

oversight and examination, which maximizes the effectiveness of examinations. It provides the

resources needed to ensure that the FCS properly identifies, manages, and controls risk. We 

allocate our examination resources to matters presenting the highest risk or potential risk to the 

System. Our examiners identify annual “risk topics” — areas on which they focus during the 

examinations they conduct throughout the year. They examine institutions onsite and offsite. 

During these examinations, they test the institutions’ credit reviews, internal audits, and 

internal controls.

A few FCS institutions require heightened supervision and enforcement actions to help them 

address weaknesses or risks we have identified. Currently, examiners are noting conditions that 

reflect the weaknesses in the agricultural economy and commodity markets. Examiners work 

with FCS institutions to ensure these and other risks are recognized and mitigated in a timely 

manner.

In total, safety and soundness activities account for $64.8 million, including 267.09 FTEs, in the 

proposed FY 2022 budget (see table 28 on page 68).
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Office of Inspector General’s FY 2022 budget request

In accordance with section 6(g)(1) of the Inspector General Act of 1978, as amended (IG Act), 

FCA’s Office of Inspector General (OIG) has provided the agency with the following information:

• OIG’s total budget: $1,894,523

• OIG’s training budget: $28,000

• OIG’s support for the Council of the Inspectors General on Integrity and Efficiency: 

$6,796

By including this information in our budget to the president, the FCA board has fulfilled the 

requirement in section 6(g)(2) of the IG Act. 

Budget Trends

This budget supports the agency’s policy and regulation program and its safety and soundness 

program. It maintains our talent pool so that we can examine and supervise the System 

effectively and monitor the changing risk environment. The FY 2022 budget is necessary to 

continue to fund employee salary and benefit costs, which represent approximately 87% of our 

budget. 

Over the past two years our annual budgets increased on average by 4.6%. The most recent 

increase is 4.8%. 

We will use the FY 2022 budget increase to meet the following goals:

• To cover salaries, benefits, and training associated with new hires 

• To provide career ladder promotions

• To provide funded leave

• To provide career progression

• To offer relocation funding as an incentive when hiring individuals for hard-to-fill 

positions

• To provide pay increases, which help us maintain comparability in employee 

compensation with other bank regulators, as required by the Financial Institution 

Reform, Recovery, and Enforcement Act of 1981 

• To provide resources to address the risk posed by the COVID-19 pandemic
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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• To support IT security enhancements, application development, data efficiencies, IT 

maintenance, and the purchase of new equipment when the lifecycles end on current 

equipment

Overall costs remained relatively stable over the past three years. However, costs for consulting 

and other services fluctuated because of changes in expenses related to security, data analytics, 

and examiner training, and because of temporary gaps in staffing. These costs also fluctuated 

when the CEO and COO controlled growth in IT investments. See table 3 for information on 

FCA budget trends.

Table 3. FCA budgets, FYs 2020 – 2022

Item FY 2020 revised 

budget

FY 2021 revised 

budget

FY 2022 proposed 

budget

Full-time permanent (FTP) $46,636,410 $48,416,288 $50,523,065

Other than FTP 1,248,630 525,453 502,784

Other personnel compensation 404,760 435,318 438,331

Total personnel compensation $48,289,800 $49,377,059 $51,464,180

Personnel benefits 19,532,246 20,757,557 21,961,806

Benefits for former personnel 25,000 0 0

Total compensation and benefits $67,847,046 $70,134,616 $73,425,986

Travel and transportation of persons 3,259,722 3,134,352 3,317,732

Transportation of things 110,025 52,669 65,346

Rent, communications, and utilities 861,360 946,046 966,292

Printing and reproduction 138,150 160,062 145,594

Consulting and other services 3,912,903 4,817,145 4,617,073

Supplies and materials 1,018,094 1,188,960 1,186,077

Equipment 482,700 436,150 995,900

Total budget $77,630,000 $80,870,000 $84,720,000

We continue our efforts to reduce costs, leverage technology, and increase efficiencies. In table 

4, we list some of the more notable ways we’ve improved operations and increased efficiency.
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Table 4. FCA actions and resulting impact

Action Resulting impact

Scrutinized issuance of information technology 

devices and specialized software

Provided cost efficiencies by purchasing 

only items that meet agency business 

needs

Improved the Enterprise Documentation Guidance 

(EDGe) system

Improved workflow and efficiencies

Piloted virtual desktop review of loans to allow exam 

teams to conduct loan reviews from agency offices

Reduced travel costs and improved 

efficiency

Increased reliance on FCS Loan Database to 

conduct analytics

Strengthened focus on safety and 

soundness activities, and increased

effectiveness and operational efficiency

Ensured service provider costs were well managed Increased cost effectiveness

Expanded use of electronic communications (e.g.,

made email more efficient by establishing secure 

connections with business partners and 

stakeholders)

Improved workflow and efficiencies

Implemented and improved audio- and 

videoconferencing, and standardized the equipment 

issued to staff

Reduced travel costs, supported

telecommuting initiatives, and maintained

continuity of operations

Allowed use of penalty fares on travel, and educated

travelers about the most cost-effective fares (e.g., 

capacity-controlled fares)

Continued to improve travel cost 

management

Reviewed monthly smartphone and wireless device 

usage

Reduced costs by ensuring devices are 

being properly utilized

Expanded use of online research and electronic 

materials for training

Reduced printing costs and supported 

environmental sustainability initiatives

Continued collaboration and resource sharing across 

FCA offices

Improved efficiencies

Developed procurement reports and held fourth 

quarter resource planning meetings

Ensured procurement actions were 

performed both accurately and timely

Sources of FCA revenue and funding

We maintain a revolving fund financed primarily from assessments to System institutions and

Farmer Mac. We also earn interest from investments with the U.S. Department of the Treasury, 

and we perform reimbursable work for the Farm Credit System Insurance Corporation and the 

U.S. Department of Agriculture. Table 5 shows budgeted sources of revenue and funding for FYs 

2020 to 2022.
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Table 5. Budgeted sources of FCA revenue and funding, FYs 2020 – 2022

Source

FY 2020

revised 

budget

FY 2021

revised 

budget

FY 2022

proposed 

budget

ASSESSMENTS

Banks, associations, and related entities $73,100,000 $76,800,000 TBD

Federal Agricultural Mortgage Corporation 2,900,000 3,000,000 TBD

Carryover fundsa 1,000,000 600,000 TBD

Assessments available for obligation $77,000,000 $80,400,000 $84,200,000b

REIMBURSEMENTSc

National Consumer Cooperative Bank $120,210 $0 $0

Farm Credit System Insurance Corporation 345,059 350,627 357,115

U.S. Department of Agriculture 164,731 119,373 162,885

Total $77,630,000 $80,870,000 $84,720,000

a. Carryover funds are amounts brought forward from prior years’ assessments that remain available for obligation. We will 

determine assessments and carryover amounts for FY 2022 in September of FY 2021.

b. Each year Congress limits the amount of assessments that we may use to pay for administrative expenses. For FY 2022, we 

propose a limit of $84.2 million.

c. From a budget standpoint, reimbursements do not include indirect costs.

FCA reserve 

The institutions we oversee are involved in two volatile industries — agriculture and finance. 

Volatility can produce financial stress for institutions, creating a need for heightened oversight 

and supervision. To ensure that we have the resources to provide the necessary supervision and 

oversight during periods of financial stress, we maintain a reserve as required under section 

5.15(a)(1)(B) of the Farm Credit Act, and the FCA board has established guidelines for it.

The reserve ensures that we can effectively and efficiently respond to safety and soundness 

issues arising within the System. It allows us to respond to these issues without increasing 

assessments at a time that may be financially difficult for System institutions. At the end of FY 

2020, the reserve totaled $14.4 million.
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Assessments

FCA’s operating costs are financed by direct assessments collected from System institutions, 

including Farmer Mac. Table 6 shows assessments for FYs 2012 through 2021. Assessments in 

2013 and 2014 were unusually low because we used larger amounts of carryover from prior-year 

assessments to help fund our operations. To fund the FY 2021 budget, we used $0.6 million of 

carryover and increased assessments by $3.8 million.

Table 6. FCS assessments, FYs 2012 – 2021

Fiscal year Assessment (in millions)

2012 $54.1

2013 $50.0

2014 $50.0

2015 $51.5a

2016 $58.3

2017 $66.8b

2018 $68.2b

2019 $72.7

2020 $73.0c

2021 $79.8

a. The original assessment was $54.5 million and was reduced by $3.0 million during the year.

b. Because of the budget limitation in the continuing resolution, the assessment was reduced in the fourth quarter by $3.0 

million.

c. The original assessment was $76.0 million and was reduced by $3.0 million during the year primarily because of restricted 

business travel.

In FY 2020, we assessed the System $73.0 million and ended the year with $1.2 million in 

reimbursable revenue and deobligations (see table 7). During the year, we had obligations of 

$73.5 million. The difference between our obligations and funding was $0.7 million, which 

represents the increase to carryover.
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Table 7. FCA funding, obligations, and assessment carryover, FYs 2019 and 2020 (in 

millions)

FCS borrower costs

FCS borrower costs are based on the relationship between the System’s total assessments and 

assets held (not including Farmer Mac). The FCS held $384.9 billion in total assets as of 

September 30, 2020, up from $354.0 billion a year earlier.

As table 8 shows, FCS borrowers incurred a net cost of approximately 1.8 basis points, or 1.8

cents for every $100 of assets held, to pay for FCA operations in FY 2020. Since FY 2012, the net 

cost to borrowers has averaged 1.9 basis points.

Borrower costs have declined over the years for the following reasons:

• System assets have grown.

• FCA has used carryover to offset additional costs. 

• FCA has taken various measures to reduce operating costs. (See table 4 for details.)

FY 2019 FY 2020

Current-year assessments $72.7 $73.0

Reimbursable revenue and deobligations $1.3 $1.2

Total funding $74.0 $74.2

Obligations $74.7 $73.5

Total funding minus obligations −$0.7 $0.7

Assessment carryover from prior years $1.9 $1.2

Carryover from assessments at end of fiscal year $1.2 $1.9
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Table 8. FCA’s net cost to System borrowers, FYs 2012 – 2021

Fiscal year ended September 30 Basis points

2012 2.2

2013 1.9

2014 1.8

2015 1.7

2016 1.8

2017 2.0

2018 2.0

2019 2.0

2020 1.8

2021 1.9

Assessments for the Federal Agricultural Mortgage Corporation (Farmer Mac)

Farmer Mac’s assessment for FY 2021 is $3.0 million. The assessment for FY 2022 is not yet 

available because the Office of Secondary Market Oversight will not complete the FY 2022 

budget and estimation of examination, oversight, and regulatory costs pertaining to Farmer Mac 

until September 2021.

Table 9 shows Farmer Mac assessments for fiscal years 2012 to 2021. These assessments include 

costs associated with increased examination and oversight activities. We have increased these 

activities because, like other federal financial regulators, we are placing additional emphasis on 

capital adequacy and stress testing.

Table 9. Farmer Mac assessments, FYs 2012 – 2021

Fiscal year Assessment (in millions)

2012 $2.25

2013 $2.38

2014 $2.38

2015 $2.40

2016 $2.45

2017 $2.50

2018 $2.50

2019 $2.75

2020 $2.90

2021 $3.00
Part II

Farm Credit Administration

_________________________________________________________________

Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Profile of the Farm Credit Administration

The Farm Credit Administration was created through an executive order of President Franklin 

D. Roosevelt and currently derives its powers and authorities primarily from the Farm Credit 

Act of 1971, as amended. As an independent agency within the executive branch of the federal 

government, we are responsible for regulating and supervising the banks, associations, and 

related entities in the Farm Credit System (FCS or System), as well as the Federal Agricultural 

Mortgage Corporation (Farmer Mac).

The FCS is the nation’s oldest government-sponsored enterprise (GSE). The Farm Credit Act 

states that the objective of the FCS is to improve the income and well-being of American farmers 

and ranchers by furnishing sound, adequate, and constructive credit and closely related services 

to them, their cooperatives, and selected farm-related businesses. In short, the FCS was created 

to provide an adequate and flexible flow of money to rural areas.

The System consists of a nationwide network of borrower-owned, cooperative financial 

institutions that provide credit and related services to

• farmers and ranchers,

• producers and harvesters of aquatic products,

• farm-related businesses,

• rural homeowners,

• agricultural and aquatic cooperatives,

• agribusinesses, and

• rural utilities.

The FCS had $301.6 billion in outstanding loans to agriculture and rural America as of 

September 30, 2020.

Farmer Mac is a stockholder-owned, federally chartered instrumentality of the United States, 

and its authority is derived from Title VIII of the Farm Credit Act. Farmer Mac was established 

in 1988 to create a secondary market for agricultural real estate loans and rural housing 

mortgage loans. In 2008, Farmer Mac’s secondary market authorities were expanded to include 

rural utility loans. It provides secondary market services through a network of agricultural 

lenders and intermediaries, including commercial banks, FCS banks and associations, life 

insurance companies, mortgage companies, and rural utility cooperatives. As of September 30, 

2020, Farmer Mac’s outstanding program activity totaled $22.0 billion.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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On a reimbursable basis, we perform examinations of certain entities that are not part of the 

Farm Credit System. FCA is required by the National Consumer Cooperative Bank Act of 1978, 

as amended, to examine and report on the condition of the National Consumer Cooperative 

Bank (NCB). Since the passage of this law, we have conducted safety and soundness 

examinations of NCB and issued reports of examination to NCB’s board of directors. NCB is a 

federally chartered, privately owned banking corporation. It is not a federal instrumentality, and 

it is not part of the FCS.2 In addition, we provide examination services on behalf of the Farm 

Credit System Insurance Corporation and the U.S. Department of Agriculture.

The U.S. Senate Committee on Agriculture, Nutrition, and Forestry and the U.S. House of 

Representatives Committee on Agriculture oversee the FCS, Farmer Mac, and FCA. Our 

operations are funded through assessments paid by the System institutions and by our 

reimbursable activities; we do not receive a federal appropriation.

Mission statement

As stated in the FCA Strategic Plan for FYs 2018 – 2023, our mission is to ensure that System 

institutions and Farmer Mac are safe, sound, and dependable sources of credit and related 

services for all creditworthy and eligible persons in agriculture and rural America. To fulfill this 

mission, we issue regulations and conduct examinations of FCS institutions and Farmer Mac to 

evaluate and oversee the safety and soundness of their activities. 

Our examinations evaluate whether institutions are complying with laws and regulations and 

are operating in a safe and sound manner. They also evaluate institutions’ compliance with the 

congressional mandate requiring System institutions to have programs to make credit and 

services available to young, beginning, and small (YBS) farmers and ranchers. In addition, we 

research, develop, and adopt rules, regulations, and other guidelines that govern how 

institutions conduct their business and interact with customers.

If any System institution, including Farmer Mac, violates laws or regulations, or if we determine 

that its operations are unsafe or unsound, we may use our enforcement authority to ensure that 

the problem is corrected in a timely manner. We also ensure that the rights of certain borrowers 

are protected.3

2 Costs have been negligible because of our agreement with the Office of the Comptroller of the Currency 

(OCC). Through this agreement, we generally rely on the OCC’s safety and soundness examinations to 

effectively and more efficiently carry out our statutory responsibilities with respect to NCB.

3 Provisions in the Farm Credit Act regarding borrower rights do not apply to loans to cooperatives.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Other statutory duties require us to issue and amend FCS institution charters, to report to 

Congress on the System’s and Farmer Mac’s financial condition and performance, and to 

approve the issuance of debt obligations by System banks. 

FCA board and governing philosophy

Our policy and regulations are established by a full-time, three-person board whose members 

are appointed by the president of the United States with the advice and consent of the Senate. 

They serve staggered six-year terms and may not be reappointed to succeed themselves after 

serving a full term or more than three years of a previous member’s unexpired term. A board 

member may serve after expiration of his or her term until a successor has been appointed and 

qualified. The president designates one member as chairman of the board; this member serves 

as chairman until the end of his or her term and may continue to serve as chairman after the 

expiration of his or her term until the president designates a new chairman. The board chairman 

also serves as the agency’s chief executive officer.

The FCA board approves charters of FCS institutions, oversees the agency’s supervision and 

examination of those institutions, and issues enforcement actions. The governing philosophy of 

the FCA board is grounded in the Farm Credit Act. The board believes that the principles on 

which the System was founded are just as important today as they were in the early decades of 

the 20th century. 

FCA organizational structure

Figure 1 presents our organizational structure and shows how the offices provide strategic 

support to the FCA board and ensure that our mission and goals are performed effectively and 

efficiently. We have our headquarters in McLean, Virginia, with field offices in Bloomington, 

Minnesota; Dallas, Texas; Denver, Colorado; and Sacramento, California.
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Figure 1. FCA organizational chart as of January 2021

For an accessible version of this chart, go to www.fca.gov/about/fca-organizational-chart.

FCA Internal Operations

FCA fosters an inclusive workplace. We have identified and adopted leading talent management 

practices to promote employee engagement. As a result of our efforts, we were ranked second on 

the 2019 list of Best Places to Work in the Federal Government among small agencies.

We have undertaken a strategic human capital planning initiative to focus the agency’s talent 

strategies and investments for the next four years. The objective of the plan is to ensure that we 

are appropriately targeting human capital investments and meeting the professional

development needs of our employees. We use the Office of Personnel Management’s Human 

Capital Framework as a guide for strategic human capital planning; this ensures that our efforts 

are in line with the President’s Management Agenda.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Human capital management

Our human capital strategies are linked to our strategic plan through clearly defined strategic 

drivers and operational goals. We regularly assess external and internal workforce trends and 

integrate best practices. We also monitor the System’s changing environment so that we can 

adjust staffing levels and maintain the necessary skill sets by hiring additional staff and by

providing employee training and development. We review our workforce planning strategies 

annually. See table 10 for full-time-equivalent (FTE) staffing levels (rounded to the nearest 

whole number) from FYs 2012 through 2022.

Table 10. Full-time-equivalent staffing levels, FYs 2012 – 2022

Fiscal year FTE staffing level

2012 287

2013 273

2014 278

2015 277

2016 290

2017 296

2018 298

2019 308

2020 297

2021 326 (authorized)

2022 330 (authorized)

Note: From FYs 2012 to 2022, the ratio of managers and supervisors to other personnel has ranged between one to five and 

one to six.

We annually review workforce demographic profiles to monitor changes, such as the age and 

grade of employees, and explore trends. From this analysis, we develop five-year projections to 

determine and mitigate the impact of employee retirements and separations. 

As of September 30, 2020, almost 22% of our personnel were eligible to retire; we expect that 

number to increase substantially in the next few years. By FY 2025, approximately 36% of our 

workforce will be eligible to retire. See table 11 for retirement eligibility projections.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 11. FCA retirement eligibility, FYs 2020 – 2025

Fiscal year

Number of staff first eligible 

during the fiscal year

Number of staff eligible at 

fiscal year end

Percentage of staff 

eligible to retire at fiscal 

year end

2020 16 68 21.7%

2021 17 85 27.2%

2022 8 93 29.7%

2023 5 98 31.3%

2024 11 109 34.8%

2025 3 112 35.8%

Also, as we demonstrated throughout the COVID-19 pandemic, the health and well-being of our 

employees are key components of our human management strategy. Shortly after the 

announcement of the national emergency in March 2020, we instituted a mandatory telework 

policy. When we later deemed it was safe to allow a limited number of staff to come to the office 

on a voluntary basis, we instituted protocols to protect the health of those entering agency 

offices. Although we continued to fulfill our public mission throughout the pandemic, we were 

always careful to preserve the health and well-being of our employees.

Training

As evidence of our commitment to fostering a climate that fully engages all staff, we provide 

professional training and development opportunities. We believe our efforts in this area help us 

attract and retain exceptional staff. We also believe these efforts have contributed substantially 

to our ranking as one of the best places to work in the federal government. 

In FY 2020, we focused on reviewing and refining our competency model and establishing links 

between our developmental offerings and the competency model. Further, we invested in the 

development of our Learning and Organizational Change Team members. As a result, we were 

able to expand, and enhance the quality of, the design and delivery of our internal training 

services. 

We coordinate training goals with the leadership skills and competencies that are necessary for

achieving our mission. We establish training projection plans at the office level and the agency 

level each year to help manage developmental activities. These plans project budget needs for 

training and development; they are directly linked to FCA’s performance management system. 

Supervisors and employees collaborate on training and career development goals. 

By working closely with agency management and conducting staff surveys, our Learning and 

Organizational Change Team gauges training needs and develops efficient and effective methods 

to acquire external training resources and to develop internal training courses and learning 

methods. 
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Formal training programs support the needs of core occupational groups through a variety of 

methods, such as in-house training, vendor-provided courses, self-study, rotational 

assignments, special assignments, shadowing experiences, and e-learning. Each employee has a 

laptop with technology to support internal and vendor-provided e-learning.

We demonstrated our commitment to training and knowledge transfer goals in FY 2020 when 

the Office of Agency Services sponsored agency-level supervisory development programs to 

increase the effectiveness of our leaders and potential leaders. To support knowledge transfer, 

we began a partnership with an academic institution to deliver graduate-level courses and 

certificate programs relevant to the agency’s mission. We also partner with OPM, other small 

agencies, and our FIRREA counterparts to provide employees access to training courses outside 

our agency.

We created and sustained an internal training website to capture examination knowledge and 

best practices. Subject-matter experts developed the information on the website, which includes 

both instructor and student materials. 

Knowledge management remains a key part of our continuous learning strategy. When we hire 

new employees in critical fields, we require them to work closely with experienced employees to 

ensure the new employees acquire the knowledge and skills they need. We use details and 

special projects to provide development opportunities.

FCA’s electronic databases, such as the internal training site used by examiners, the Policies and 

Procedures database, the electronic examination files, and the Training and Evaluations 

database, also support our knowledge management goals. These databases enable employees to 

communicate and share knowledge.

We have established internal SharePoint sites to enhance knowledge transfer and collaboration. 

All employees have access to most of the sites, including the sites containing resources on 

contracting, technology, leadership development, audit and internal controls, and plain writing. 

Other sites are intended for the use of specific groups of employees, such as credit specialists, 

operations specialists, and recruiters. Still others are set up for work groups on topics such as 

training, planning and reporting, and policy development.

Examiner commissioning program

Through our Commissioning Program, we are developing the next generation of diverse and 

highly skilled examiners, ensuring they have the knowledge, skills, and talents necessary to 

accomplish the agency’s mission. The program helps examiners develop their skills in FCA’s 

primary areas of oversight — credit, finance, and operations, as well as examination 

management.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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We also invest in the development of our commissioned examiners through human capital 

planning, examiner career development, and specialty programs. The specialty programs enable 

examiners to gain technical expertise and encourage them to pursue professional development 

and certification. Various professional development and certification programs are available to 

help our examiners hone their expertise. 

Diversity and inclusion

Because we recognize the value of diversity and inclusion to the agency, we work hard to attract 

and retain staff with varied backgrounds and skills. Our recruiters regularly visit job fairs at 

universities with high minority enrollment, and we have several Special Emphasis Programs at 

the agency to raise awareness about diversity and inclusion in our workforce. As a result of our 

emphasis on diversity and inclusion, in 2019 the Partnership for Public Service ranked FCA 

number 1 among small federal agencies for support of diversity. 

FCA compensation program

Section 5.11(c)(2)(A) of the Farm Credit Act was amended in 1989 by the Financial Institutions 

Reform, Recovery, and Enforcement Act (FIRREA). This provision authorizes the FCA chairman 

to set and adjust FCA employees’ compensation without regard to the general pay schedule 

applicable to most federal agencies. The chairman may also provide additional pay and benefits 

to enable FCA to maintain comparability with other federal banking agencies as defined in 

FIRREA. Section 1206 of FIRREA requires the federal banking agencies to “seek to maintain 

comparability regarding compensation and benefits.” The provision was intended to promote 

comparability in pay and benefits among the federal banking agencies and to avoid competition

among the agencies for qualified staff.

To comply with FIRREA, we participate in a biennial survey of the other federal bank regulators 

and adjust our employees’ compensation and benefits accordingly. Our compensation rates are 

similar to the average market rate provided by other agencies covered under FIRREA.

We use a pay-for-performance program to adjust each employee’s salary according to his or her 

performance rating and salary range position. We make salary adjustments each calendar year 

based on several factors, including the compensation programs of other federal bank regulators 

and available funding.

The FCA board approved for the 2021 compensation program a merit pay matrix with pay 

increases ranging from 0.39% to 3.1%, depending on each employee’s performance rating and 

placement in the salary range for his or her grade. The board also approved increases to locality 

rates to align them with the locality rates of the Federal Deposit Insurance Corporation. Table 12 

provides the revised 2021 locality rates for FCA locations. 
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 12. FYs 2020 and 2021 locality rates

Locality 2020 rate 2021 rate

McLean 28.35% 29.52%

Bloomington 19.13% 19.62%

Denver 20.63% 21.53%

Dallas 20.35% 20.99%

Sacramento 22.29% 22.89%

Rest of United States 14.70% 14.99%

External contracting and shared services

As table 13 shows, we continue to outsource several functions. We have a shared-service 

agreement with the Bureau of the Fiscal Service (BFS). We also outsource our payroll function to

USDA’s National Finance Center and our personnel security and credentialing function to the 

Department of Interior’s Business Center. Outsourcing these services allows us to manage 

employee benefits and other agency functions without additional personnel costs.

Table 13. Shared services, FY 2021

Contract Services provided Amount

Administrative Service Center 

(BFS)

Full-service accounting, e-Travel, credit 

card, and platform procurement services

$818,280

National Finance Center (USDA) Payroll services $47,960

Department of Interior Personal security and credential services $50,082

Defense Counterintelligence

Security Agency

Background investigation services $90,000

Tables 14 and 15 provide a summary of our competitive consulting service contracts for FYs 

2020 and 2021.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 14. Competitive consulting service contracts of more than $25,000, FY 2020

Contract Purpose Amount

Second Pillar Consulting

(17-FCA-450-005)

Financial risks assessment for the Office of 

Secondary Market Oversight $70,000

Human Resource Support 

(19-FCA-641-017) HR support services $120,000

August Schell Enterprises 

(20-FCA-651-006) U.S. federal production support $58,717

Harper, Rains, Knight & Company

(18-FCA-700-001)

Financial statement audit services $47,787

Williams and Adley 

(20-FCA-700-003) FISMA evaluation services $60,850

Wells Fargo Retirement

(19-FCA-641-004) Retirement administration services $56,000

MetLife (20-FCA-641-001) Long-term disability services $160,303

Personnel Decisions Research 

Institute (15-FCA-301-001) Commission test and staff evaluation services $88,619

Stafford Consulting

(19-FCA-641-026)

Administrative support services for the Office of 

Agency Services $85,000

LinkVisum (19-FCA-641-028) Human capital support services $34,670

Totem Consulting 

(19-FCA-641-030)

Consulting services for improving the 

onboarding process

$27,500

Shaw, Bransford and Roth P.C.

(20-FCA-621-001) Legal services $70,000

Gartner, Inc. (20-FCA-641-025) HR leadership services $41,108

Patch Advisors (20-FCA-651-030) Security advisory and assistance services $49,980

Info-Tech Research Group 

(20-FCA-651-024) IT services $30,439
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 15. Competitive consulting service contracts of more than $25,000, FY 2021

Contract Purpose Amount

Second Pillar Consulting

(17-FCA-450-005)

Financial risks evaluation and assessment for 

the Office of Secondary Market Oversight $70,000

August Schell Enterprises

(19-FCA-651-037) U.S. federal production support $60,775

Harper, Rains, Knight & Company

(18-FCA-700-001) Financial statement audit services $55,432

Wells Fargo Retirement

(19-FCA-641-004) Retirement administration services $56,000

Williams and Adley

(20-FCA-700-003) FISMA evaluation services $60,850

MetLife (19-FCA-641-005) Long-term disability services $159,386

Personnel Decisions Research 

Institute (15-FCA-301-001) Commission test and staff evaluation services $66,136

Stafford Consulting 

(19-FCA-641-026)

Administrative support services for the Office 

of Agency Services $61,766

Totem (20-FCA-641-022) Human resource support services $84,650

Other functions and activities

In FY 2020, we had no reception and representation expenses and no foreign travel 

expenditures.

Leveraging FCA technology

We have designed a flexible IT program at FCA that can adapt to changing technical and 

business needs. The Office of Information Technology holds regular partnership meetings with 

staff from other business units to ensure that we monitor our IT investments closely and adjust 

our priorities as needed. Through these partnership meetings, we identify multiyear IT 

initiatives and include these in our annual Information Resources Management Strategic Plan. 

The current plan drives IT spending through 2021 and beyond. In 2021, we will continue to 

improve FCA’s data reporting, dashboard, and analysis capabilities and strengthen our 

cybersecurity. We will engage contractors when we need specialized expertise, and we will 

expand use of cloud services where appropriate. 
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Over the past year, we accomplished the following:

• Replaced all staff laptops with the latest technology available

• Procured and implemented enhanced mobile communication services

• Implemented streaming video services to improve the delivery of training

• Upgraded our data backup services for better scalability and retention

• Developed a digital routing and approval system to support a remote workforce

• Continued to develop new, and to upgrade existing, applications to support FCA’s 

examination procedures

• Developed and rebuilt several applications to avoid depending on outdated technology 

and to better support our users

• Continued to improve our technical architecture for data ingestion and ETL (extract, 

transform, and load) systems

• Continued to enhance data analysis platforms and added geographic information system 

capabilities to legacy tools

• Built an automated system to synchronize Farm Credit System updates with internal 

FCA data systems

• Continued to strengthen our IT security program and our privacy program

• Began steps to significantly improve our records management and controlled 

unclassified information (CUI) culture

• Improved FCA’s email security

• Improved IT project management tools with feedback mechanisms, notifications, and 

dashboards to better communicate with Farm Credit System institutions

For more information about the ways we will use technology in FYs 2021 and 2022 to achieve 

our strategic goals, see table 2 on page 6.
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Independent auditing and accountability

The Office of Inspector General contracted with Harper, Rains, Knight & Company, P.A., to 

perform the FY 2020 audit of FCA’s financial statements. On November 10, 2020, Harper, 

Rains, Knight & Company issued an unmodified opinion on our financial statements for the 

fiscal year ended September 30, 2020. 

The auditors opined that the financial statements presented fairly, in all material respects, FCA’s 

financial position as of September 30, 2020, in conformity with generally accepted accounting 

principles. In addition, although the auditors did not express an opinion on the matter, they did 

not identify any deficiencies in internal control over financial reporting that would be 

considered material weaknesses. 

The auditors also did not identify any instances of noncompliance with selected provisions of 

laws and regulations or other reportable matters that could have a direct and material effect on 

the financial statements.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Ensuring Safety and Soundness

The Farm Credit Administration’s role is to regulate the Farm Credit System and to ensure that 

System institutions comply with applicable laws and regulations. In doing so, we ensure the 

safety and soundness of the System, including Farmer Mac. 

The first section below, titled “The Farm Credit System,” summarizes examination and 

supervisory activities performed on the banks, direct-lending associations, and service

organizations of the FCS. Because the role of Farmer Mac is different from the rest of the 

System, we discuss Farmer Mac separately in the second section below. In addition, we provide 

examination and other services on a reimbursable basis to certain entities that are not part of 

the System. These activities are summarized in the third section below, titled “Other Entities.”

Our examination and supervision responsibilities are carried out by staff located in our 

headquarters in McLean, Virginia, and in four field offices — in Bloomington, Minnesota; 

Dallas, Texas; Denver, Colorado; and Sacramento, California. We do not expect any changes in 

the field office structure in FY 2021.

The Farm Credit System

Statutory and regulatory requirements

The Farm Credit Act requires FCA to examine each FCS institution at least once every 18 

months. We meet this requirement through a risk-based process of oversight and examination 

designed to maximize efficiency while addressing System risk effectively. 

To monitor and evaluate the System’s safety and soundness, we need loan portfolio and other 

data from System institutions. Our regulations include the following reporting requirements:

• Each System institution must prepare and file reports of condition and performance with 

FCA each quarter in accordance with 12 CFR 621.12. These reports provide detailed 

information on each institution’s financial performance and portfolio quality, and other 

relevant information.

• The Federal Farm Credit Banks Funding Corporation must prepare consolidated System 

information and make this information available to investors and the public in 

accordance with 12 CFR part 630.

System institutions submit other data to us through our Consolidated Reporting System. Some 

of the submitted information is available to the public on our website (www.fca.gov). We also 

collect loan data from all System institutions. We have been expanding loan data collection and 

analysis to enhance our evaluation of risk to the System as a whole. 
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In addition to overseeing and examining the System, we establish policies and regulations to 

ensure that the System addresses key risk areas. For example, our regulations require System 

institutions to have effective loan underwriting and loan administration processes, to achieve 

and maintain minimum capital levels, to provide strong asset-liability management, and to 

establish high standards for governance and transparent disclosures for shareholder 

information.

Risk-based examination and supervision

We design examination and supervision processes to address material risks and emerging issues 

at the institution level and Systemwide. We base our examination and supervision strategies on 

institution size, existing and prospective risk exposure, and the scope and nature of each 

institution’s business model. In evaluating each institution’s business model, we must ensure 

the institution fulfills its public mission as a government-sponsored enterprise. In addition to 

overseeing and examining individual institutions, we also identify and evaluate Systemwide 

emerging risk and allocate examination resources to matters of highest priority and potential 

risk.

We have developed a comprehensive regulatory and supervisory framework to promote and help 

ensure the System’s safety and soundness and its compliance with laws and regulations. This 

approach recognizes each institution’s responsibility and ability to identify and manage both 

institution-specific and systemic risks. Our examination and supervision program promotes 

accountability in System institutions for their programs, policies, procedures, and controls. 

System institutions have developed effective risk-management cultures in response to our 

examination and supervision programs and our policies and regulations. These programs, 

policies, and regulations continue to set high standards for the System.

Because of volatility in the agricultural and credit markets, as well as significant changes in the 

financial markets, ensuring the safety and soundness of the System is more important and 

challenging than ever. To address these challenges, we annually identify and use risk topics to 

set examination priorities, identify potential regulatory issues, allocate resources, and evaluate 

emerging risk exposures. The examination and supervision program includes strategies for 

addressing these emerging risks and communicating our expectations to both internal and 

external audiences. Risk topics for 2021 are as follows:

• Credit risk management and loan servicing

• Operational risk management — Response to risk and the pandemic
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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When our examiners identify unsafe and unsound practices or conditions within a System 

institution or find that an institution has violated a law or regulation, we outline the corrective 

actions the institution must take in a Report of Examination or other form of communication. If 

necessary, we use our enforcement powers to bring about changes in an institution’s policies 

and practices to correct unsafe or unsound conditions or violations of law or regulations. 

However, in most cases, we achieve corrective action without the use of formal enforcement 

powers.

Measuring the safety and soundness of the System

We use our Financial Institution Rating System (FIRS) as a key method to assess the safety and 

soundness of each FCS institution. The FIRS provides a general framework, consisting of 

component and composite ratings, for evaluating and assimilating significant financial, asset 

quality, and management factors. Similar to systems used by other federal financial regulators, 

the FIRS evaluates six key component areas to properly assess the degree of risk in an 

institution. These key component areas are capital, assets, management, earnings, liquidity, and 

sensitivity (CAMELS). 

Based on our CAMELS ratings, we assign an overall composite rating for the institution. The 

rating system ranges from 1 to 5. A composite rating of 1 indicates that an institution is sound in 

every respect and that it exhibits the strongest performance and risk management practices, 

whereas a rating of 5 represents an extremely high, immediate, or near-term probability of 

failure. 

Our examiners continually evaluate institutional risk and regularly review and update FIRS 

ratings to reflect current risks and conditions in each System institution. We provide guidance 

on both quantitative benchmarks and qualitative factors to help examiners apply the FIRS 

process consistently. 

We disclose these confidential FIRS composite and component ratings to the institution’s board 

and management to provide perspective on relative safety and soundness. Examination reports 

and other forms of communication also provide the institution’s board with an assessment of 

the governance, management, quality of assets, and financial condition and performance of the 

institution.
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Recent results 

As the composite FIRS ratings show, the System’s condition and performance have been sound 

over the past several years. The following summarizes FIRS ratings for System banks and 

associations as of October 1, 2020:

• Thirty institutions were rated 1.

• Thirty-eight were rated 2.

• Four were rated 3 or lower.

See figure 2 for FIRS rating trend information. For a more detailed discussion of the financial 

condition and performance of the System, see part III of this report.

Figure 2. Farm Credit System Financial Institution Rating System (FIRS) composite 

ratings

Source: FCA's FIRS Ratings Database.

Note: This chart reflects ratings for only the System’s banks and direct-lending associations; it does not include ratings for the 

System’s service corporations, Farmer Mac, or the Federal Farm Credit Banks Funding Corporation. Also, the numbers in the 

bars indicate the number of institutions by FIRS rating.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table data for figure 2

FIRS Ratings

01/01/1601/01/1701/01/1801/01/1901/01/2010/01/20

Total

1 rating 46 44 39 34 30 30

2 rating 29 31 29 32 35 38

3 rating or lower 3 2 5 7 7 4

Total 78 77 73 73 72 72

Federal Agricultural Mortgage Corporation

Through our Office of Secondary Market Oversight (OSMO), we provide for the examination and 

general supervision of Farmer Mac’s safe and sound performance of its powers, functions, and 

duties. OSMO performs annual CAMELS-based examinations, which include examination of 

capital, assets, management, earnings, liquidity, and sensitivity.

Statutory authority

OSMO was established in 1992 by the Food, Agriculture, Conservation, and Trade Act 

Amendments of 1991 (Public Law 102 – 237), which amended section 8.11 of the Farm Credit 

Act. OSMO is required to be managed by a full-time director who reports to the FCA board, and 

OSMO’s activities, to the extent practicable, must be carried out by individuals not responsible 

for supervising the banks and associations of the FCS.

Data reporting requirements

Farmer Mac is required to submit quarterly Call Reports to OSMO in addition to meeting 

several other periodic reporting requirements related to Farmer Mac’s regulatory risk-based 

capital, mission, liquidity, and financial derivatives portfolio. Farmer Mac is also subject to the 

disclosure and reporting requirements of the Securities and Exchange Commission.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Financial condition and performance

Farmer Mac’s financial condition and performance trends were generally positive in FY 2020 

despite a modest increase in troubled loan volume. 

• Net income available to common shareholders was $88.8 million for the 12 months 

ended September 30, 2020, compared with $84.1 million during FY 2019. 

• Farmer Mac’s statutory core capital totaled $984.2 million at the end of FY 2020, 

compared with $793.3 million at the end of FY 2019. The minimum statutory core 

capital requirement for Farmer Mac’s on- and off-balance-sheet exposures totaled 

$669.9 million at the end of FY 2020. Thus, Farmer Mac exceeded its statutory 

minimum core capital requirement by approximately $314.2 million. 

• At the end of FY 2020, Farmer Mac had $1.0 billion in regulatory capital (as defined in 

the Farm Credit Act) available to meet the $222.1 million minimum requirement 

established by FCA’s Risk-Based Capital Model.

• Program activity increased approximately 5.1%, ending FY 2020 at $22.0 billion. Farmer 

Mac had $3.6 billion in its liquidity portfolio as of the year-end. 

Credit quality remained stable and generally good. Farmer Mac held no real estate owned as of 

fiscal year-end 2020, compared with fiscal year-end 2019, when it held $1.8 million. Total 

acceptable loan volume decreased 0.2 percentage points to 91.5% in FY 2020.

Risk-Based Capital (RBC) Model

Section 8.32 of the Farm Credit Act requires the RBC Model to be used to determine the amount 

of regulatory capital that Farmer Mac needs to maintain positive capital during a 10-year period 

under certain credit risk and interest rate risk situations. The RBC Model must estimate credit 

losses on agricultural mortgages and rural utility loans owned or guaranteed by Farmer Mac. 

The rate of loan default and severity of losses on agricultural mortgages must be reasonably 

related to the default rate and severity of losses experienced in contiguous areas of the United 

States; the contiguous areas considered must contain at least 5% of the total U.S. population 

that experienced the highest rate of default and severity of agricultural mortgage losses during 

the past two consecutive years or more. The rate of loan default and severity of losses on rural 

utility loans must be reasonably related to risks in electric and telephone facility loans.

The Farm Credit Act also requires the RBC Model to incorporate an interest rate risk stress 

scenario based on prescribed changes in interest rates on Treasury obligations of various terms. 

In addition, the Farm Credit Act requires Farmer Mac to maintain capital to protect against 

management and operational risks. This additional capital must amount to 30% of the sum of 

the credit loss and interest rate risk components of the RBC Model.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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The output of the stress test depends on Farmer Mac’s risk profile. High-risk loan assets or 

significant interest rate risk exposure causes the RBC Model to calculate a higher regulatory 

capital requirement. Conversely, if Farmer Mac maintains a low risk profile in both its loan 

portfolio and interest rate risk exposure, the stress test will calculate a low capital requirement. 

Our regulations require Farmer Mac to have its operation of the RBC Model validated by an 

independent third party at least every three years. In all these third-party validations, Farmer 

Mac has been found to be operating the model appropriately. 

Other entities

On a reimbursable basis, we perform examinations of certain entities that are not part of the 

Farm Credit System.

• As mandated by 12 U.S.C. 3025, we oversee the safety and soundness examinations of 

the National Consumer Cooperative Bank, which owns a federal savings bank, has a 

congressional charter, and specializes in nonagricultural cooperative loans. Costs have 

been negligible because of our agreement with the Office of the Comptroller of the 

Currency. Through this agreement, we generally rely on their safety and soundness 

examinations to effectively and more efficiently carry out our statutory responsibilities 

with respect to NCB.

• From time to time, the U.S. Department of Agriculture contracts with us to provide 

examination services for specific USDA programs. We annually review the amount of 

resources dedicated to providing these services. Currently, the amount is limited.

• We also provide services on a reimbursable basis to the Farm Credit System Insurance 

Corporation (FCSIC), an independent, government-controlled corporation that insures 

the timely payment of principal and interest on certain System notes, bonds, and other 

obligations issued to investors. The FCSIC board consists of the members of the FCA 

board. Section 5.59(a)(5) of the Farm Credit Act provides that, to the extent practicable, 

FCSIC must use FCA personnel and resources to minimize duplication of effort and to 

reduce costs.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Developing Regulations and Policies

FCA routinely issues regulations, informational memorandums, policy statements, and other 

guidance to ensure that the System complies with the law, operates in a safe and sound manner, 

and efficiently carries out its statutory mission.

We are committed to providing a flexible regulatory environment that allows the System to offer 

high-quality, reasonably priced credit and related services to farmers and ranchers, their 

cooperatives, rural residents, and other entities on which farming operations depend. 

We strive to develop balanced, well-reasoned, and flexible regulations, always taking into 

account both the benefits and the costs of these regulations to System institutions. Our 

objectives are to ensure that the System’s activities remain consistent with the law and safety 

and soundness principles and to encourage participation by member-borrowers in the 

management, control, and ownership of their institutions.

Regulatory and policy projects active at end of FY 2020

The FCA board periodically reviews its regulatory agenda to evaluate progress on open projects 

and to determine the need for additional initiatives. The FCA board-approved agenda is part of 

the federal Unified Agenda, which is published online at www.reginfo.gov. We publish our 

Regulatory Projects Plan on our website to notify the public of our upcoming regulatory actions 

and to encourage the public to participate in the regulatory process, but we are not obligated to 

act on our agenda items. The following list summarizes the topics for which we are considering 

regulatory action.

Standards of conduct: We plan to publish a final rule to clarify and strengthen regulations 

related to the standards of conduct of directors, employees, and agents of System institutions. 

Eligibility criteria for outside directors: We plan to publish the final rule that the board 

approved in FY 2020 regarding the eligibility criteria for outside directors. This rule will address 

the eligibility of a candidate for an outside director position if the candidate owns an interest in 

an entity that borrows from, or holds stock in, a System bank or association. 

Implementation of the current expected credit losses methodology for allowances:

We plan to publish a final rule that will amend our regulations to address recent changes to U.S. 

generally accepted accounting principles.

Revisions to regulatory tier 1/tier 2 capital: We plan to publish a final rule to make 

technical and minor substantive corrections and clarifications to our regulations governing tier 

1/tier 2 regulatory capital.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Appraisal regulations: We plan to issue a proposed rule to consider whether changes in 

appraisal regulations are necessary in light of changing credit and economic conditions.

Borrower rights: We plan to issue a proposed rule to clarify disclosure and servicing 

requirements related to borrower rights.

Limitations on bank director compensation: We plan to issue a proposed rule that would 

revise FCA regulations on compensation of bank directors to comply with the Agriculture 

Improvement Act of 2018.

Bank Liquidity Reserve: We plan to issue an advance notice of proposed rulemaking to 

consider whether we should amend our liquidity regulations and more closely align them with 

the Basel III liquidity framework and the approach of other federal bank regulatory agencies.

Young, beginning, and small (YBS) farmers and ranchers: We will continue following

up on the advance notice of proposed rulemaking that we issued in 2019 and develop guidance 

for System institutions that will improve data accuracy and the reporting of YBS performance.

Cooperative principles: We plan to complete a review of cooperative principles and practices 

at System institutions.

Regulatory and policy projects completed in FY 2020 and early FY 2021

Following is a list of projects we completed in FY 2020 and early FY 2021, along with a list of 

communications we issued to System institutions to clarify our rules.

Eligibility criteria for outside directors: We approved a final rule regarding the eligibility 

criteria for outside directors. This rule addresses the eligibility of a candidate for an outside 

director position if the candidate owns an interest in an entity that borrows from, or holds stock 

in, a System bank or association. 

Amortization limits for agricultural credit associations and production credit 

associations: We issued a proposed rule and published a final rule to clarify the amortization 

limits for agricultural credit associations and production credit associations.

Margin and capital requirements for covered swap entities: We issued a proposed rule 

and published an interim final rule and two final rules to amend the margin and capital 

requirements for covered swap entities.

Investment eligibility: We published a final rule to amend FCA regulations to include certain 

obligations unconditionally guaranteed by the U.S. Department of Agriculture as eligible 

investments for associations.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Criteria to reinstate nonaccrual loans: We published a final rule on the criteria for 

reinstating nonaccrual loans and reducing the compliance burden on System institutions.

District financial reporting: We issued a proposed rule and published a final rule to amend 

regulations governing the presentation of association financial information within a Farm Credit 

bank’s annual report to shareholders. 

Revisions to regulatory tier 1/tier 2 capital: We issued a proposed rule to make technical 

and minor substantive corrections and clarifications to our regulations governing tier 1/tier 2 

regulatory capital.

Civil money penalty adjustment: We published a final rule to adjust FCA’s civil money 

penalties for inflation as required by the Federal Civil Penalties Inflation Adjustment Act 

Improvements Act of 2015.

Interest rate risk management: We issued a bookletter to System institutions to provide 

clarification and guidance on an effective framework for managing interest rate risk. 

Financing hemp: We issued an informational memorandum to help System banks and 

associations assess how financing hemp fits into the lending strategies at their institutions.

Guidance for System institutions affected by the COVID-19 pandemic: We issued an 

informational memorandum to provide System institutions with guidance for managing

challenges associated with the COVID-19 pandemic.

Guidance on the Paycheck Protection Program for small businesses affected by the 

COVID-19 pandemic: We issued an informational memorandum to provide System 

institutions with guidance on the Paycheck Protection Program.

LIBOR transition guidance: We issued an informational memorandum to provide guidance 

to System institutions, including Farmer Mac, on the transition away from the London 

Interbank Offered Rate (LIBOR).

FCS corporate activity and other prior approvals and clearances

In accordance with the Farm Credit Act and our regulations, we issue prior approvals for 

corporate and noncorporate applications. Corporate applications include requests from FCS 

institutions for us to issue new or amended charters, as well as to cancel charters because of 

mergers, consolidations, liquidations, or terminations of System status. 
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Noncorporate applications include requests related to offerings of preferred stock and 

subordinated debt. They also include requests for prior approval of funding, mission-related 

investments, and any new financially related services.

Corporate activities in FY 2020 and early FY 2021

On December 31, 2019, an agricultural credit association (ACA) affiliated with CoBank merged 

its two production credit association (PCA) subsidiaries into a single PCA and its two federal 

land credit association (FLCA) subsidiaries into a single FLCA, resulting in an ACA with two 

subsidiaries.

On February 1, 2020, we approved the issuance of a charter for a new service corporation.

On September 1, 2020, we amended the charters of an association and its subsidiaries to reflect 

a change in the location of the headquarters.

On November 25, 2020, we amended the charters of an ACA and its subsidiaries to reflect a 

change in the location of the headquarters. 

On January 1, 2021, an ACA affiliated with CoBank merged into another ACA affiliated with 

CoBank, resulting in an ACA with two subsidiaries.

Projected mergers and FCS institution size

As of January 1, 2021, the System had 67 direct-lender associations and 4 banks. Eight service 

corporations and special-purpose entities (see pages 47 and 48) brought the total number of 

FCS institutions, including Farmer Mac, to 78. Because of mergers and consolidations, the 

number of FCS associations has decreased by 63% since 2000, and the number of FCS banks 

has decreased by 43%.

Although merger activity has slowed in recent years, we estimate that over time the number of 

direct-lender associations will continue to decrease. These mergers, coupled with asset growth, 

will increase the size of System entities. System institutions will also have more complex 

management systems and offer a broader range of financial services to their borrowers.

Security offerings during FY 2020

There was a preferred stock offering by the Farm Credit Bank of Texas totaling $350 million. 

There were no other preferred stock or subordinated debt offerings by FCS banks and 

associations during FY 2020.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Funding activity

The FCS raises funds for loans and investments primarily by selling Systemwide debt securities 

through the Federal Farm Credit Banks Funding Corporation,4 the fiscal agent for the FCS 

banks. In this way, funds flow from worldwide capital market investors to agricultural 

producers, agricultural cooperatives, and rural communities, providing them with efficient 

access to global resources. Systemwide debt securities are issued as discount notes, master 

notes, bonds, or designated bonds. As required by the Farm Credit Act, the System must obtain 

FCA approval for all debt issuances.

For the 12 months ended September 30, 2020, the FCS issued $426 billion in Systemwide debt, 

compared with $355 billion in FY 2019 and $304 billion in FY 2018. Issuances increased 

considerably in FY 2020 for a couple reasons. System institutions called more debt and reissued 

it with more favorable interest rates. Institutions also issued more discount notes in order to 

strengthen liquidity during the financial stress caused by the COVID-19 pandemic. 

Investor demand for FCS debt instruments remained strong as a result of the System’s 

continued favorable financial performance and the reduction in the overall debt outstanding of 

two other government-sponsored enterprises. FCS debt outstanding increased to $309 billion at 

the end of FY 2020, an increase of $27 billion from the end of FY 2019.

The financial markets experienced significant volatility because of the global pandemic and its 

effect on the economy. The Federal Reserve, along with other central banks, took several

measures to provide financial backstops domestically. It also took measures to help stabilize 

global financial markets. One measure was to decrease short-term interest rates to near zero; 

another was to fortify liquidity in the market by increasing bond purchases.

As a result of these measures, System institutions and others significantly increased the call 

options they exercised. Interest rates for System debt when compared with U.S. Treasuries of 

similar maturities remained favorable and in demand by investors.

4 See section 4.9 of the Farm Credit Act. The Federal Farm Credit Banks Funding Corporation’s primary 

function is to issue, market, and handle debt securities on behalf of System banks. In addition, the 

Funding Corporation helps the System banks with a variety of asset/liability management and specialized 

funding activities. Headquartered in the greater New York City area, the Funding Corporation is 

responsible for the System’s financial disclosures and the release of public information concerning the 

financial condition and performance of the System as a whole.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Rural business investment companies

The 2002 Farm Bill created the Rural Business Investment Program for leveraged rural business 

investment companies (RBICs) and gave the secretary of agriculture the authority to license and 

examine them. The 2008 Farm Bill modified the program to allow for nonleveraged RBICs and 

to permit System institutions to form and invest in nonleveraged RBICs.

In 2012, we entered into an interagency agreement with USDA whereby we performed the 

following services for USDA regarding nonleveraged RBICs:

• Provided technical advice regarding regulatory and program requirements

• Reviewed nonleveraged RBIC licensing applications for RBICs in which System 

institutions would hold at least 10% in total ownership, and advised USDA as to whether 

to approve the applications

• Examined licensed nonleveraged RBICs

The 2012 agreement was replaced with a new five-year agreement in 2017, under which we will 

continue to review nonleveraged RBIC licensing applications and to examine licensed 

nonleveraged RBICs. The agreement calls for us to review and provide recommendations for 

seven RBIC applications over a five-year timeframe. We agreed to expend no more than 1,800 

hours, or 90% of one full-time-equivalent staff position, to complete the RBIC assignments 

during a fiscal year.
Part III

Farm Credit System

_________________________________________________________________

Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Profile of the Farm Credit System

The Farm Credit System consists of a network of borrower-owned cooperative financial 

institutions, along with related service organizations, and the Federal Agricultural Mortgage 

Corporation. The Farm Credit System was created by Congress in 1916 to provide American 

agriculture with a dependable source of credit. It is the oldest of the government-sponsored 

enterprises (GSEs). As of January 1, 2021, the System had four banks providing loan funds to

• 66 agricultural credit association (ACA) parent organizations, each of which generally 

has two subsidiaries — a production credit association (PCA) and a federal land credit 

association (FLCA), and

• 1 stand-alone FLCA.

The map in figure 3 shows each bank’s chartered territory.

Although legally separate, the ACA and its PCA and FLCA subsidiaries operate as an integrated 

lending business, with loans made through the subsidiaries appropriate to the authority of each 

subsidiary. The ACA, the PCA, and the FLCA are jointly and severally liable for the full amount 

of their indebtedness to the funding bank under a general financing agreement. In addition, the 

parent company and its subsidiaries pledge their respective assets as security for each other’s 

debts and obligations and share each other’s capital. 

The three associations have a common board and management and a common set of 

shareholders. Under the Farm Credit Act, ACAs make long-term agricultural mortgage loans 

and short- and intermediate-term operating loans. PCAs make short- and intermediate-term 

loans. FLCAs, which are organized as federal land bank associations, originate long-term 

agricultural mortgages. FLCAs are exempt from federal and state income taxes; ACAs and PCAs 

are not tax-exempt.

System institutions provide credit and financially related services to farmers, ranchers, 

producers or harvesters of aquatic products, and farmer-owned cooperatives. Institutions also 

make loans for agricultural processing and marketing activities, rural housing, certain farmrelated businesses, agricultural and aquatic cooperatives, rural utilities, and foreign and 

domestic entities in connection with international agricultural trade. The System raises its loan 

funds by selling debt securities in the national and international money markets; these securities 

are subject to FCA’s approval, but they are not guaranteed by the U.S. government.
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Figure 3. The chartered territories of Farm Credit System banks as of January 1, 2021

NOTE: CoBank, ACB, funds 20 associations in the indicated areas and serves cooperatives nationwide; Farm Credit Bank of 

Texas funds 14 associations; AgriBank, FCB, funds 14 associations; and AgFirst Farm Credit Bank funds 19 associations. The 

Farm Credit System contains a total of 71 banks and direct-lending associations.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Additional System entities and service corporations

In addition to the System’s banks and associations, we are responsible for regulating and 

examining the Federal Agricultural Mortgage Corporation and the Federal Farm Credit Banks 

Funding Corporation. We also regulate and examine the six service corporations organized 

under section 4.25 of the Farm Credit Act:5

• AgVantis, Inc.

• Farm Credit Leasing Services Corporation

• Farm Credit Financial Partners, Inc. 

• FCS Building Association

• Farm Credit Foundations

• SunStream Business Services 

Federal Agricultural Mortgage Corporation — Farmer Mac6 is a stockholder-owned, 

federally chartered instrumentality of the United States created in 1988 to establish a secondary 

market for agricultural real estate and rural housing mortgage loans. In May 2008, the Food, 

Conservation, and Energy Act of 2008 expanded Farmer Mac’s program authorities by allowing 

it to purchase and guarantee securities backed by rural utility loans made by cooperatives.

Farmer Mac conducts its business primarily through four core programs:

• Farm & Ranch 

• USDA Guarantees

• Rural Utilities 

• Institutional Credit 

Under the Farm & Ranch and Rural Utilities segments, Farmer Mac purchases, or commits to 

purchase, qualified loans, or obligations backed by qualified loans, that are not guaranteed by 

any instrumentality or agency of the United States. Under USDA Guarantees, Farmer Mac 

purchases the guaranteed portions of farm ownership and farm operating loans, rural business 

5 Section 4.25 of the Farm Credit Act provides that one or more FCS banks or associations may organize 

a service corporation to perform functions and services on their behalf. These federally chartered service 

corporations are prohibited from extending credit or providing insurance services.

6 Farmer Mac is established in law as a federal instrumentality of the FCS. However, Farmer Mac has no 

liability for the debt of any other System institution, and the other System institutions have no liability for 

Farmer Mac’s debt. Farmer Mac is organized as an investor-owned corporation, not a member-owned 

cooperative. Investors in voting stock may include commercial banks, insurance companies, other 

financial organizations, and FCS institutions. Nonvoting stock may be owned by any investor. Farmer Mac 

is regulated by FCA through the Office of Secondary Market Oversight. The director of this office reports 

directly to the FCA board on matters of policy.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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and community development loans, and certain other loans guaranteed by USDA. Under 

Institutional Credit, Farmer Mac purchases bonds backed by eligible debt obligations of 

agricultural and rural utility lenders. 

Federal Farm Credit Banks Funding Corporation — The Funding Corporation is owned 

by System banks; it sells debt securities on behalf of the banks to raise funds for loans and other 

purposes. System institutions obtain the majority of their funds through the sale of these 

securities in the nation’s capital markets. These securities, chiefly in the form of bonds and 

discount notes, are offered by the Funding Corporation through a nationwide group of securities 

dealers and dealer banks. The Funding Corporation’s debt issuance programs provide the 

System banks with funds to lend to farmers, ranchers, agricultural cooperatives, rural 

homeowners, and rural utilities; debt issuances also provide the banks with funding for their 

other operations.

AgVantis, Inc. — AgVantis provides technology-related and other support services to 

associations in the CoBank, ACB, district. It was chartered by FCA in 2001 and is owned by 10 

associations in the CoBank district. 

Farm Credit Leasing Services Corporation — The Leasing Corporation, owned by 

CoBank, provides equipment leasing services to eligible borrowers, including agricultural 

producers, cooperatives, and rural utilities.

Farm Credit Financial Partners, Inc. — Owned by five agricultural credit associations, 

Farm Credit Financial Partners provides support services to three associations affiliated with 

CoBank and two associations affiliated with AgriBank. 

FCS Building Association — The Building Association, which acquires, manages, and 

maintains facilities to house our headquarters and field office staff, was formed in 1981. It is 

owned by System banks and is subject to the oversight and direction of the FCA board.

Farm Credit Foundations — Farm Credit Foundations provides human resource services to 

its employer-owners, including payroll processing, benefits administration, centralized vendor 

management, workforce management and operations services, corporate tax and financial 

reporting services, and retirement workshops. It is owned by 34 System entities (31 FCS 

associations, 2 service corporations, and 1 FCS bank).

SunStream Business Services — SunStream provides technology-related and other services 

to the bank and associations in the AgriBank district. Chartered by FCA in 2020, it is owned by 

the district bank, 2 district associations, and an ownership collaboration of 9 district 

associations.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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FCS mission fulfillment

The System fulfills its overall mission by lending to agriculture and rural America. Through the 

System’s original authorization in the Federal Farm Loan Act of 1916 and subsequent revisions 

to the law, System lending authorities have evolved to include the following:

• Long-term agricultural real estate loans and rural home loans

• Short- and intermediate-term agricultural loans

• Loans to producers and harvesters of aquatic products

• Loans to certain farmer-owned agricultural processing facilities and farm-related 

businesses

• Loans to farmer-owned agricultural cooperatives

• Loans that finance agricultural exports and imports

• Loans for rural utilities

• Limited portions of loans to entities that qualify under the System’s similar-entity 

authority

Financial Condition and Performance

The FCS remained safe and sound during a challenging year. In 2020, agricultural producers 

and rural communities faced considerable uncertainty, rapidly shifting market conditions, and 

significant business disruptions. The System’s mission to provide reliable credit and related 

services in support of agriculture and rural America was more important than ever. 

Through the first nine months of 2020, the System reported favorable financial results, 

including strong earnings, increased capital, and manageable portfolio credit risk. FCS banks 

maintained access to debt capital markets and held liquidity positions well above the regulatory 

minimum. System institutions are strongly capitalized, with significant risk-bearing capacity. 

They are well-positioned to support U.S. farmers and ranchers.

Credit stress for certain agricultural sectors and geographical regions is likely to remain high in 

2021. Producers in the protein sectors face uncertain demand prospects and rising input costs. 

Intensifying drought, particularly in the West and Great Plains, remains a concern for both 

livestock and crop producers. However, prospects have improved for the major cash crops.

Grain prices rallied in late 2020 because of tighter-than-expected world supplies, lower global 

production, and strong demand. 
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For the past several years, government payments have played an important role in the farm 

economy, accounting for a growing share of farm income. For 2020, substantial ad hoc 

government payments helped lessen the near-term impact of the COVID-19 pandemic on 

agricultural producers. However, considerable longer-term uncertainty remains. High-cost 

producers and those with significant leverage will be the most vulnerable to financial stress.

Note: All financial data in this section are as of September 30, 2020, unless noted otherwise.

Earnings

The FCS earned $4.45 billion in the first nine months of 2020, a 9.6% increase from the $4.06 

billion earned in the same period last year. As table 16 shows, net income increased in 2020 

because of higher net interest income and higher noninterest income, partially offset by higher 

provisions for losses.

Table 16. Net income (dollars in millions)

System net income

First 9 months

of 2019

First 9 months

of 2020

Dollar 

change

Percent 

change

Net interest income $6,150 $6,682 532 8.7%

− Provision for losses 95 165 70 73.7%

= Net interest income after 

loss provision $6,055 $6,517 $462 7.6%

+ Noninterest income 494 548 54 10.9%

− Noninterest expense 2,363 2,478 115 4.9%

= Pretax income $4,186 $4,587 $401 9.6%

− Provision for income tax 131 141 10 7.6%

= Net income $4,055 $4,446 $391 9.6%

Source: Third Quarter 2020 Quarterly Information Statement of the Farm Credit System, p. F-3.

The increase in net interest income was primarily due to higher average interest-earning assets, 

which increased to $364.3 billion for the nine months ended September 30, 2020, from $339.7 

billion a year earlier. Net interest margin was 2.45%, up 4 basis points from the same period a 

year ago (table 17). Net interest spread increased 20 basis points. This change was driven by a 

101-basis-point decrease in the annualized rate on interest-bearing liabilities, which was

partially offset by an 81-basis-point decrease in the rate on total interest-earning assets.
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Table 17. Interest margin in annualized percentages

Net interest margin First 9 months 

of 2019

First 9 months 

of 2020

Change 

(bps)

Total interest-earning assets 4.46 3.65 (81)

Total loans 4.91 4.12 (79)

Investments and other assets 2.52 1.67 (85)

Total interest-bearing liabilities 2.44 1.43 (101)

Net interest spread 2.02 2.22 20 

Impact of noninterest-bearing items 0.39 0.23 (16)

Net interest margin 2.41 2.45 4 

Source: Third Quarter 2020 Quarterly Information Statement of the Farm Credit System, p.16.

bps = basis points

As table 18 shows, all districts except AgriBank reported an increase in the return on average 

assets, and all districts reported an increase in the return on average capital from the prior year.

Table 18. Profitability across System districts for the first nine months of year

Profitability ratios AgFirst AgriBank Texas CoBank

Percentage return 

on average assets

2019 1.41 1.68 1.48 1.39

2020 1.62 1.64 1.63 1.41

Percentage return 

on average capital

2019 8.17 9.05 10.03 10.22

2020 9.55 9.14 11.23 10.33

Source: Third Quarter 2020 Quarterly Information Statement of the Farm Credit System, p. F-56

Note: The financial ratios are for the combined banks and associations.

System growth

The System reported strong year-over-year growth. FCS assets were up $31.0 billion or 8.7% to 

$384.9 billion. Much of the increase was the result of growth in the System’s loan portfolio, 

which grew by $25.4 billion or 9.2%.

Balances for all major loan categories (real estate mortgage, production and intermediate-term, 

agribusiness, and rural infrastructure) were up. Real estate mortgage and agribusiness lending 

accounted for much of the growth, increasing 10.0% and 10.3%, respectively.

All System districts reported higher loan portfolio balances. The AgriBank district reported the 

largest percentage increase in volume, with loan balances growing 10.8% year over year. 

Provided in table 19 are the gross loan volume and the percentage change in volume for System 

districts.
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Table 19. Gross loan growth by district and Systemwide (dollars in millions)

District

September 30, 2019 September 30, 2020

Change 

in dollars

Percent 

Gross change loansPercent 

total

Gross 

loans

Percent 

total

AgFirst $30,449 11.0 $31,672 10.5 $1,223 4.0 

AgriBank 111,938 40.6 124,025 41.2 12,087 10.8 

Texas 25,946 9.4 27,830 9.2 1,884 7.3 

CoBank 113,037 40.9 123,344 40.9 10,307 9.1 

Insurance 

Fund and 

Intra-System 

Eliminations

(5,258) (1.9) (5,310) (1.8) (52) 1.0 

Total for 

System 276,112 100.0 301,561 100.0 $25,449 9.2 

Source: Third Quarter 2019 Quarterly Information Statement of the Farm Credit System, p. F-50; and Third Quarter 2020

Quarterly Information Statement of the Farm Credit System, p. F-52.

As noted in figure 4 below, the System’s total assets increased by 8.7% during the 12-month 

period, up from 5.7% for the same period a year ago.

Figure 4. Year-over-year percent change in System assets, September 2010 – 2020

Source: Quarterly Information Statements of the Farm Credit System.
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Table data for figure 4

Year

Year-over-year 

percent change in 

System assets

2010 2.4

2011 3.2

2012 5.3

2013 5.5

2014 7.3

2015 7.4

2016 7.9

2017 2.3

2018 4.2

2019 5.7

2020 8.7

Assets — Investments

The System’s investments totaled $68.1 billion, up 10.9% from a year earlier. As shown in table 

20, investments available for sale totaled $66.4 billion. Investments held to maturity were $1.8 

billion, including $1.0 billion for mortgage-backed securities.

The System increased its holdings of U.S. Treasury securities, U.S. agency securities, mortgagebacked securities, asset-backed securities, and other securities but reduced its holdings of 

money market instruments.

During the most recent 12-month period, the yield on investments available for sale decreased 

from 2.40% to 1.42%, with yields decreasing on all available-for-sale segments. For investments 

held to maturity, the yield decreased from 3.91% to 2.75% mainly because of a decrease in the 

yield for mortgage-backed securities.

Ineligible investments held by the System totaled $0.5 billion at fair value, up from $0.4 billion 

a year ago.
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Table 20. FCS investments (dollars in millions)

Investment classification

September 30, 

2019

September 30, 

2020

Change

Amount

Amount WAY 

(%) Amount WAY (%) Dollars Percent WAY (bps)

Available for 

sale 

(fair value)

Money market 

instruments $6,875 2.47 $6,138 0.70 ($737) (10.7) (177)

U.S. Treasury 

securities 18,767 2.08 24,521 1.34 5,754 30.7 (74)

U.S. agency 

securities 2,943 2.38 2,989 1.89 46 1.6 (49)

Mortgagebacked 

securities

26,601 2.53 27,480 1.54 879 3.3 (99)

Asset-backed 

securities 3,959 2.78 4,363 1.90 404 10.2 (88)

Other 

securities 449 3.15 862 1.14 413 92.0 (201)

Total $59,594 2.40 $66,353 1.42 $6,759 11.3 (98)

Held-tomaturity 

(amortized 

cost)

Mortgagebacked 

securities

$1,302 4.06 $1,040 3.40 ($262) (20.1) (66)

Asset-backed 

securities 457 3.13 651 1.39 194 42.5 (174)

Other 

securities 75 5.98 62 6.14 (13) (17.3) 16

Total $1,834 3.91 $1,753 2.75 ($81) (4.4) (116)

Total

All FCS 

investments $61,428 2.44 $68,106 1.49 $6,678 10.9 (95)

Source: Third Quarter 2020 Quarterly Information Statement of the Farm Credit System, pp. F-10 – 12; and Third Quarter 2019

Quarterly Information Statement of the Farm Credit System, pp. F-10 – 12.

WAY = weighted average yield; bps = basis points.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Loan quality

Credit risk in the System’s portfolio remained relatively low compared with credit risk over the 

past 10 years. It is well within the System’s risk-bearing capacity, despite the unprecedented 

challenges faced in 2020. Nonperforming assets totaled $2.321 billion or 0.77% of total loans 

and other property owned, as compared with $2.540 billion or 0.92% a year earlier.

In the first nine months of 2020, net charge-offs for the System increased to $81 million from 

$31 million for the same period a year ago. Annualized net charge-offs equaled just 0.04% of 

average loans outstanding, up from 0.02% for the same period in 2019. The allowance for loan 

losses increased to $1.828 billion in the first nine months of 2020, up 4.5% from the same 

period in 2019. See table 21 for additional information about the allowance for loan losses and 

other loan quality measures.

Portfolio loan quality deterioration is possible in 2021. While prospects have improved for the 

major cash crops, producers in the protein sector will be challenged by uncertain demand 

prospects, weather, and rising input costs. High-cost producers and those with significant 

leverage will be the most vulnerable to financial stress. 

Table 21. FCS loan quality

Loan quality September 30, 

2019

September 30, 

2020

Change in

percentage 

points

Nonperforming assets as percentage 

of total loans and other property owned 0.92% 0.77% (0.15)

Nonperforming assets as percentage 

of capital 4.09% 3.52% (0.57)

Nonaccrual loans as percentage of 

total loans 0.74% 0.60% (0.14)

ALL as percentage of total loans 0.63% 0.61% (0.02)

ALL as percentage of nonperforming 

assets 68.7% 78.8% 10.1 

ALL as percentage of nonaccrual loans 85.4% 100.7% 15.3 

Source: Quarterly Information Statements of the Farm Credit System.

ALL = allowance for loan losses.

Liabilities, funding, and liquidity

The System’s total liabilities increased by 9.4% to $318.9 billion. See table 22 below. Short-term 

debt securities (due within one year) increased 11.3% to $110.7 billion. Systemwide debt 

securities due after one year increased 8.0% to $185.8 billion. Short-term debt securities 

represented 38.6% of the total Systemwide liabilities, up from 38.0% a year earlier.
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Table 22. Systemwide debt (dollars in millions)

System debt by maturity September 30, 

2019

September 30, 

2020

Change

Dollars Percent

Systemwide discount notes 

due within one year $17,738 $23,917 $6,179 34.8

Systemwide bonds, mediumterm notes, and master notes 

due within one year

93,007 99,337 6,330 6.8

Total short-term liabilities $110,745 $123,254 $12,509 11.3

Systemwide bonds, mediumterm notes, and master notes 

due after one year

$172,116 $185,812 13,696 8.0

Other liabilities 8,757 9,850 1,093 12.5

Total liabilities $291,618 $318,916 $27,298 9.4

Source: Third Quarter 2019 Quarterly Information Statement of the Farm Credit System, p. F-2; and Third Quarter 2020

Quarterly Information Statement of the Farm Credit System, p. F-2.

Liquidity risk management is necessary for the Farm Credit System to ensure its ability to meet 

its financial obligations. These obligations include the repayment of Systemwide debt securities 

as they mature, the ability to fund new and existing loans, and the ability to fund operations in a 

cost-effective manner. The System’s liquidity position decreased slightly to 172 days from 177 a 

year earlier. Each bank met the three tiers of the liquidity reserve requirements and exceeded 

the regulatory minimum of 90 days of liquidity.7

The aggregate duration gap for the FCS (the sum of the banks’ duration gaps) was a positive 0.9 

months compared with a positive 2.6 months a year earlier, which means the System’s exposure 

to interest rate risk was lower this year. A duration gap of a positive six months to a negative six 

months generally indicates a small exposure to interest rate risk. An institution’s overall 

exposure to interest rate risk is a function not only of its duration gap but also of the financial 

leverage inherent in the institution’s capital structure.

7The first tier of the liquidity reserve must consist of enough cash and cash-like instruments to cover each 

bank’s financial obligations for 15 days. The second tier must contain enough cash and highly liquid 

instruments to cover a bank’s obligations for the next 15 days, and the third tier of the liquidity reserve 

must contain enough cash and highly liquid instruments to cover a bank’s obligations for the next 60 days.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Capital

The System continued to build capital in 2020. According to the System’s combined financial 

statements, capital totaled $66.0 billion, a 5.9% increase from a year earlier (see table 23). The 

increase in capital was driven by an increase in net income earned and retained, partially offset 

by cash distributions to stockholders. Retained earnings as a percentage of total capital 

remained steady at 79.0% compared with 79.1% a year ago. The System’s overall capital-toassets ratio declined to 17.1% from 17.6% a year ago.

Table 23. FCS capital composition (dollars in millions)

System capital September 30,

2019

September 30,

2020

Change

Dollars Percent

Preferred stock $3,168 $3,222 $54 1.7

Capital stock and participation 

certificates 1,985 $1,951 (34) (1.7)

Additional paid-in capital 3,738 3,738 0 0.0

Restricted capital (Insurance 

Fund) 5,122 5,368 246 4.8

Accumulated other 

comprehensive income (loss) (1,005) (437) 568 (56.5)

Retained earnings 49,350 52,172 2,822 5.7

Total capital $62,358 $66,014 $3,656 5.9

Source: Data from the Third Quarter 2019 Quarterly Information Statement of the Farm Credit System, p. F-2; and Third Quarter 

2020 Quarterly Information Statement of the Farm Credit System, p. F-2.

Note: FCA does not include the Insurance Fund as a capital component in its regulatory capital regulations. In addition, FCA 

regulations treat earnings that have been allocated to members as equities, not retained earnings. Unallocated retained 

earnings make up most of the System’s retained earnings category.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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All System institutions were complying with FCA’s regulatory minimum capital requirements: 

• Common equity tier 1 capital (CET1) ratio of 4.5% of risk-adjusted assets 

• Tier 1 capital ratio of 6.0% of risk-adjusted assets 

• Total capital ratio of 8.0% of risk-adjusted assets

• Tier 1 leverage ratio of 4.0% of total assets, of which at least 1.5% must consist of 

unallocated retained earnings (URE) and URE equivalents

• Permanent capital ratio of at least 7.0% of risk-adjusted assets

The regulatory capital framework includes a capital cushion (capital conservation buffer) of 

2.5% above the CET1 ratio, tier 1 capital ratio, and total capital ratio requirements. The 

regulations also require a leverage capital buffer of 1.0% above the tier 1 leverage ratio 

requirements. If capital ratios fall below these buffer thresholds, FCA must approve capital 

distributions and certain discretionary compensation payments before the distributions are 

made. Table 24 shows that all banks exceeded all minimum capital regulatory requirements. 

Table 24. Regulatory capital ratios of FCS banks

Regulatory capital ratios AgFirst AgriBank Texas CoBank

Common equity tier 1 

9/30/2019 18.6 17.3 9.8 12.9

9/30/2020 18.0 17.1 9.6 12.7

Tier 1 capital

9/30/2019 19.0 18.0 16.0 15.1

9/30/2020 18.4 17.7 16.0 14.8

Tier 1 leverage

9/30/2019 7.0 5.5 7.2 7.6

9/30/2020 6.8 5.4 7.1 7.4

Permanent capital 

ratio

9/30/2019 19.0 18.0 16.1 15.2

9/30/2020 18.4 17.8 15.9 14.9

Total capital

9/30/2019 19.1 18.1 16.2 16.1

9/30/2020 18.5 17.8 16.0 15.8

Change (0.6) (0.3) (0.2) (0.3)

Source: Data from the Third Quarter 2019 Quarterly Information Statement of the Farm Credit System, p. F-45; the Third 

Quarter 2020 Quarterly Information Statement of the Farm Credit System, p. F-47; and the Third Quarter 2019 and 2020

Quarterly Shareholder Reports for FCS banks.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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System associations also exceeded all minimum requirements. The System reported capital 

levels as follows:

• CET1 capital ratio: 11.6% to 36.2%

• Tier 1 capital ratio: 11.6% to 36.2%

• Tier 1 leverage ratio: 10.6% to 34.6% 

• Total capital ratio: 12.0% to 37.4%
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Young, Beginning, and Small Farmers and Ranchers

FCA supports the Farm Credit System’s mission to serve young, beginning, and small (YBS) 

farmers, ranchers, and producers and harvesters of aquatic products. We define young farmers 

as those who are 35 years old or younger, beginning farmers as those who have been farming for 

10 years or less, and small farmers as those with less than $250,000 in annual sales.

The System’s YBS mission is outlined in the Farm Credit Act, and we have adopted regulations 

to implement the YBS provisions of the act. The Farm Credit Act and FCA regulations stipulate 

that each FCS bank must have written policies that direct each association to have the following:

• A program for furnishing sound and constructive credit and financially related services 

to YBS farmers

• A mission statement describing the program’s objectives and specific means to achieve 

the objectives

• Annual quantitative targets for credit to YBS farmers

• Outreach efforts and annual qualitative goals for offering credit and related services that 

meet the needs of YBS farmers

An association’s board oversight and reporting are key parts of every YBS program. Each 

institution must report annually to FCA on the operations and achievements of its YBS program. 

Each association also must establish an internal controls program to ensure that it provides 

credit in a safe and sound manner.

In addition, FCA regulations require association business plans to include a marketing plan and 

strategies with specific outreach toward diversity and inclusion within each market segment. 

Operational and strategic business plans must include the goals and targets for the association’s 

YBS lending. System institutions must also coordinate with other government and private 

sources of credit in implementing their YBS programs. FCA’s oversight and examination 

activities monitor each institution’s assessment of its performance and market penetration in 

the YBS area.

In early 2019, we engaged the public through our advance notice of proposed rulemaking. Using 

public comment and input, the agency is modernizing the System’s reporting of YBS data for 

lending and nonlending activities. To accomplish this, we are engaged in a transparent longterm process to use existing data assets to reduce regulatory burden, improve efficiency, and 

promote consistency in YBS data reporting.
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We have also improved the tracking of nonlending activities that support YBS producers. The 

past year’s progress in improving data quality will support our other two YBS goals — to share 

best practices across the System and to evaluate the growth and performance of YBS programs 

over the long term. In addition, we recently began working with USDA’s Farm Service Agency to 

find specific ways for agricultural lenders to better leverage USDA resources for YBS producers.

Results

The following information summarizes the quantitative information that System institutions 

provided for their YBS programs in calendar year 2019. The System’s YBS lending results are 

also available on our website at www.fca.gov.

In 2019, a total of 269,939 new loans were made by the System, totaling $90.9 billion. The total 

number of outstanding loans at year-end 2019 was 914,386, amounting to $280.0 billion.

Young: The System reported making 49,104 new loans to young farmers in 2019, and the 

volume of these loans amounted to $10.1 billion. The new loans made to young farmers in 2019 

represented 18.2% of all loans the System made during the year and 11.1% of the dollar volume 

of loans made. At the end of 2019, the System reported 177,590 loans outstanding to young 

farmers, totaling $31.0 billion.

Beginning: The System reported making 67,088 new loans to beginning farmers in 2019, and 

the volume of these loans amounted to $14.3 billion. The new loans made to beginning farmers 

in 2019 represented 24.9% of all System loans made during the year and 15.7% of the dollar 

volume of loans made. At the end of 2019, the System reported 272,654 loans outstanding to 

beginning farmers, totaling $48.6 billion.

Small: System institutions reported making 123,494 new loans to small farmers in 2019, 

totaling $14.4 billion. The new loans made to small farmers in 2019 represented 45.7% of all 

System loans made during the year and 15.9% of the dollar volume of loans made. At the end of 

2019, the System reported 459,894 loans outstanding to small farmers, totaling $51.9 billion.

Please note: Because the YBS mission is focused on each borrower group separately, data are 

reported separately for each of the three YBS categories. Since some loans fit more than one 

category, adding the loans across categories does not produce an accurate measure of the System’s 

YBS lending.

New loans made in 2019 by dollar volume and number of loans

From December 31, 2018, to December 31, 2019, the System’s total new loan dollar volume 

increased by 5.4%. New loan dollar volume to young farmers increased by 7.3%, to beginning 

farmers by 8.0%, and to small farmers by 15.9%. 
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The number of loans made during the year increased for both total System lending and for all 

YBS categories. The number of total System loans made during the year increased by 4.8%. The 

number of loans to young farmers increased by 5.9%, to beginning farmers by 8.1%, and to small 

farmers by 7.8%.

Outstanding loans by dollar volume and number of loans

Both the dollar volume of the System’s total loans outstanding and the dollar volume of YBS 

loans outstanding increased in 2019. Total System loan dollar volume outstanding increased by 

6.3%. The loan dollar volume outstanding to young farmers increased by 3.3%, to beginning 

farmers by 3.9%, and to small farmers by 4.6%. 

The number of total System loans outstanding remained relatively flat in 2019, increasing by 

0.5%. The number of loans outstanding to young farmers increased by 1.0%, to beginning 

farmers by 1.8%, and to small farmers by 0.6%. 

Ratio of new and outstanding YBS loans to total System loans

The ratio of new YBS loans (by number) to total new System loans was 18.2% for young farmers, 

24.9% for beginning farmers, and 45.7% for small farmers. The ratio of outstanding YBS loans 

(by number) to total outstanding System loans was 19.4% for young farmers, 29.8% for 

beginning farmers, and 50.3% for small farmers. All the ratios either increased slightly from 

2018 or remained flat.

Table 25. YBS loans made during 2019 (as of December 31, 2019)

Type of

farmer

Number of 

loans

Percentage of 

total number 

of System 

loans

Dollar 

volume of 

loans in 

millions

Percentage 

of total 

volume of 

System 

loans

Average 

loan size

Young 49,104 18.2% $10,085 11.1% $205,380

Beginning 67,088 24.9% $14,283 15.7% $212,906

Small 123,494 45.7% $14,421 15.9% $116,772
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 26. YBS loans outstanding (as of December 31, 2019)

Type of 

farmer

Number of 

loans

Percentage of 

total number 

of System 

loans

Dollar 

volume of 

loans

in millions

Percentage 

of total 

volume of 

System 

loans

Average 

loan size

Young 177,590 19.4% $31,043 11.1% $174,802

Beginning 272,654 29.8% $48,645 17.4% $178,414

Small 459,894 50.3% $51,869 18.5% $112,785

Source: Annual Young, Beginning, and Small Farmer Reports submitted by each System lender through the FCS banks. Note: 

The YBS totals listed in tables 25 and 26 include loans, advancements, commitments, and participation interests to farmers, 

ranchers, and aquatic producers. The totals exclude rural home loans made under 613.3030, loans to cooperatives, and 

activities of the Farm Credit Leasing Services Corporation.

Market Share of Farm Debt

According to the U.S. Department of Agriculture’s December 2020 forecast, total farm debt is 

estimated to have topped $435 billion at the end of 2020, up 4.0% from a year earlier and up 

38% since 2013. Commercial banks and the Farm Credit System are the primary suppliers of 

credit to farmers; other providers include life insurance companies, USDA programs, Farmer 

Mac, individuals, and merchants and dealers.

The System’s share of the $419 billion farm debt market at the end of calendar year 2019 was 

42.6%, up from 41.4% at the end of 2018. The market share for commercial banks stood at 

40.2% at the end of 2019, down from 41.7% at the end of 2018. The combined share of other 

lender groups rose to 17.3%.

Historically, except for the high credit stress period of the 1980s and various market 

adjustments in the 1990s, FCS institutions have typically held the largest share of the farm real 

estate debt market, while commercial banks have held the largest share of non-real estate farm 

debt. At year-end 2019, the share of farm debt secured by farm real estate was 46.9% for the 

System and 36.7% for commercial banks. At year-end 2019, the share of farm debt secured by 

collateral other than farm real estate was 34.9% for the System and 46.3% for commercial 

banks.

Part IV

Performance Budget 

FY 2022

_________________________________________________________________

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Performance Budget Overview

Our FY 2022 performance budget reflects our commitment to maintaining a flexible regulatory 

environment that meets current and future rural credit needs while ensuring the safety and 

soundness of the FCS. The total performance budget (table 27) is $84.72 million and reflects a 

4.8% increase from FY 2021.

Table 27. FCA performance budget, FYs 2020 – 2022

FY 2020 revised

budget

FY 2021 revised

budget

FY 2022 proposed

budget

Policy and regulation $16,797,670 $18,064,099 $18,693,200

Safety and soundness 59,301,572 61,630,600 64,758,250

Reimbursable activities* 1,530,758 1,175,301 1,268,550

Total $77,630,000 $80,870,000 $84,720,000

* In contrast to the reimbursement numbers in table 5, these totals include indirect costs.

Policy and regulation

Our performance budget includes approximately $18.7 million for the policy and regulation 

program, a 3.5% increase from FY 2021. Most of the funds requested for policy and regulation in 

FY 2022 will support regulatory projects that were published in the Unified Agenda in the fall of 

2020. We will also use these funds to support other statutory and regulatory activities, including 

policy studies and market research; management of our Consolidated Reporting System, which 

stores the financial information that System institutions submit to us; and approvals of 

corporate applications, System funding requests, and mission-related investment programs.

Safety and soundness

The performance budget includes approximately $64.8 million for the safety and soundness 

program, a 5.1% increase from FY 2021. This increase is necessary because we have reallocated 

resources from reimbursable activities to meet System examination needs.

By statute, we are required to examine each FCS institution at least once every 18 months except 

Farmer Mac, which we must examine at least once a year. Examiners evaluate the overall 

condition and performance of these institutions and communicate the results to the institutions’ 

boards of directors and management through discussions and reports of examination. The 

Financial Institution Rating System ratings are evaluated and assigned to individual institutions 

at least quarterly. In FY 2022 budgeted monies will continue to support development of 

examination guidance and systemic risk oversight of System institutions and Farmer Mac.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Reimbursable activities

During FY 2022, we expect to perform approximately $1.27 million in reimbursable work for the 

following organizations. 

• Farm Credit System Insurance Corporation (FCSIC) — We will provide services 

to support examination, information technology, human resources, and communication 

and public affairs. We will also help complete one premium audit.

• USDA — We will support USDA in its review of the Rural Business Investment 

Programs.

• National Consumer Cooperative Bank (NCB) — We will oversee the NCB’s safety 

and soundness examinations. Costs have been negligible because of our agreement with 

the Office of the Comptroller of the Currency (OCC). Through this agreement, we 

generally rely on the OCC’s safety and soundness examinations to effectively and more 

efficiently carry out our statutory responsibilities with respect to NCB.

Table 28 summarizes the costs associated with our program activities, broken down by products 

and services.

Table 28. FY 2022 proposed budget and full-time equivalents for program activities

Program 

activity Products and services Budget amount FTEs

Policy and 

regulation

Regulation and policy 

development 15,895,366 49.72

Statutory and regulatory approvals 2,797,834 8.59

Total for policy and regulation $18,693,200 58.31

Safety and 

soundness

Examination $59,561,263 253.44

Economic, financial, and risk 

analysis 3,960,924 9.77

FCS data management 1,236,063 3.88

Total for safety and soundness $64,758,250 267.09

Reimbursable 

activities Total for reimbursable activities $1,268,550 4.99

All program 

activities Total $84,720,000 330.39
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Desired Outcomes for Strategic Goals

Our strategic goals and desired outcomes, which are detailed in table 29, help us measure 

whether we have achieved our public mission. The information that follows provides 

• the strategies we use to accomplish the outcomes and

• the measures for each outcome, with targets that reflect our desired performance for FYs 

2021 through 2022.

Table 29. Desired outcomes for strategic goals

Strategic goal Desired outcome

1. Ensure that the FCS and Farmer Mac fulfill their 

public missions for agriculture and rural areas.

A regulatory environment that provides 

for fulfilling the public missions of the 

System and Farmer Mac

2. Evaluate risk and provide timely and proactive 

oversight to ensure the safety and soundness of the 

FCS and Farmer Mac.

Effective risk identification and timely 

corrective action

3. Cultivate an environment that fosters a well-trained, 

motivated, and diverse staff while providing an 

effective plan for leadership succession.

A high-performing, diverse workforce 

that supports the mission of the 

agency

Goal 1: We established the policy and regulation program to track the costs of achieving a 

regulatory environment that enables the System and Farmer Mac to fulfill their public missions. 

We track costs associated with the following products and services:

• Regulation and policy development 

• Statutory and regulatory approvals

Goal 2: We established the safety and soundness program to track the product and service costs 

of identifying risk and taking timely corrective action. We track costs associated with the 

following products and services:

• Examination

• Economic, financial, and risk analysis

• FCS data management

Goal 3: Our third goal focuses on human capital. We recognize that to achieve our first two 

goals we must have a well-trained, motivated, and diverse workforce, and we must ensure that 

we have an effective plan for leadership succession.
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Goal 1

Strategies

For goal 1, we are using the following strategies to achieve a flexible regulatory environment that 

enables the System and Farmer Mac to fulfill their public missions.

1. Ensure that the capital rules for the FCS and Farmer Mac are consistent with standards 

for the financial service industry and preserve their financial strength and stability so 

they can meet the credit needs of eligible borrowers.

2. Within the framework of the Farm Credit Act, develop and update policies and 

regulations as appropriate so that the System, including Farmer Mac, can continue to 

effectively serve its members as conditions in agriculture and rural America change.

3. Emphasize the public purpose and mission-related responsibilities of the agricultural 

GSEs to serve all of agriculture and rural America. This includes innovative programs for 

serving the credit and related service needs of YBS farmers, ranchers, and producers and 

harvesters of aquatic products.

4. Encourage the System to provide products and services to all creditworthy and eligible 

potential borrowers and to promote outreach to enhance diversity and inclusion.

5. Encourage diversity on the boards and in the workforce of System institutions. 

6. Consistent with the Farm Credit Act, enable the agricultural GSEs to structure 

themselves to best serve their members and rural America.

7. Encourage System institutions to be conscious of the reputation risk associated with 

their lending and investment decisions.

8. Promote public trust in FCA’s regulatory framework for the System and Farmer Mac by 

developing policy guidance that supports mission achievement, financial stability, and 

transparency.

9. Encourage full participation of stakeholders in the development and review of regulatory 

and policy proposals as appropriate.

Measuring the achievements

Table 30 shows the measures we will use to evaluate our efforts to maintain a flexible regulatory 

environment for the FCS and Farmer Mac in FYs 2021 and 2022. 
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Table 30. Goal 1 — Performance measures 

Measure

FYs 2021 –

2022

Target

1. Percentage of FCS institutions providing products and services that serve 

creditworthy and eligible persons and perform outreach to enhance diversity 

and inclusion.

≥90%

2. Whether Farmer Mac’s business plan contains strategies to promote and 

encourage the inclusion of all qualified loans, including loans to small farms 

and family farmers, in its secondary market programs, and whether its business 

activities further its mission to provide a source of long-term credit and liquidity 

for qualifying loans.

Yes

3. Percentage of direct-lender institutions with satisfactory consumer and borrower 

rights compliance. ≥90%

4. Percentage of direct-lender institutions with YBS programs that are in 

compliance with YBS regulations. ≥90%

5. Whether the majority of objectives listed in the preamble of each final rule were 

met on the two-year anniversary of the rule’s effective or implementation date. Yes

6. Percentage of pre-rulemaking projects and proposed rules on which FCA 

requested input from persons outside of FCA. (This measure considers all of 

the pre-rulemaking projects and proposed rules that were listed as completed 

on FCA’s Unified Agenda Abstracts for the reporting period.)

100%

Budgets

Table 31 provides the budgeted amounts to achieve a flexible regulatory environment from FYs 

2020 to 2022.

Table 31. Budgets to achieve goal 1

FY 2020 revised

budget

FY 2021 revised

budget

FY 2022 proposed

budget

Regulation and policy development $14,413,911 $15,358,980 $15,895,366

Statutory and regulatory approvals 2,383,759 2,705,119 2,797,834

Total $16,797,670 $ 18,064,099 $18,693,200
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Goal 2

Strategies

For goal 2, we are using the following strategies to achieve effective risk identification and timely 

corrective action.

1. Seek early FCA board input on policy and regulatory issues. Ensure that the board has 

timely and comprehensive information to be fully informed and able to respond 

appropriately.

2. Maintain strong and frequent two-way communication with stakeholders on issues of 

risk and safety and soundness.

3. Continue proactive oversight of institution-specific and systemic risks.

4. Effectively remediate weakened institutions.

5. Ensure that technology, information management, and cybersecurity awareness are 

priorities at FCA and in the FCS.

6. Ensure that strong governance, standards of conduct, and ethical behavior are part of the 

organizational culture of the FCS.

Measuring the achievements

Table 32 shows the measures we will use to evaluate our efforts to effectively identify risk and 

take timely corrective action in FYs 2021 and 2022. 
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Table 32. Goal 2 — Performance measures 

Measure

FYs 

2021 –

2022

Target

1. Percentage of System assets in institutions with composite CAMELS ratings of 1 or 2. ≥90%

2. Percentage of requirements in supervisory agreements with which FCS institutions have 

at least substantially complied within 18 months of execution of the agreements. ≥80%

3. Percentage of institutions complying with regulatory capital ratio requirements. ≥90%

4. Whether the Office of Secondary Market Oversight’s examination and oversight plan and 

activities effectively identify emerging risks, and whether appropriate supervisory and 

corrective actions have been taken to effect change when needed.

Yes

5. Percentage of institutions with satisfactory audit and review programs, including 

institutions with acceptable corrective action plans. 100%

6. Whether five or more reports and dashboards were created that use data collected from 

the Farm Credit System to assess risk in the System. Yes

Budgets

Table 33 provides the budgeted amounts we need to identify risk in the FCS and to take timely 

corrective action from FYs 2020 to 2022.

Table 33. Budgets to achieve goal 2

FY 2020 revised

budget

FY 2021 revised

budget

FY 2022 proposed

budget

Examination $54,965,298 $56,695,997 $59,561,263

Economic, financial, and risk 

analysis 3,373,931 3,528,344 3,960,924

FCS data management 962,343 1,406,259 1,236,063

Total $59,301,572 $61,630,600 $64,758,250
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Goal 3

Strategies

For goal 3, we are using the following strategies to maintain a high-performing, diverse 

workforce that supports the mission of the agency. There is no specific budget for goal 3; all 

costs are part of the budgets for goals 1 and 2.

1. Maintain a highly skilled and diverse workforce to meet FCA’s current and future 

regulatory development, risk analysis, examination, and supervision needs.

2. Facilitate the development of the skills our workforce needs to evaluate FCS risk and 

provide timely and proactive oversight.

3. Ensure adequate succession planning and knowledge transfer to ensure that future FCA 

leadership and staff possess the knowledge and skills required to be an effective arm’s 

length regulator.

4. Encourage a workplace culture that motivates staff to be engaged, embraces diversity in 

all its forms, and promotes strong ethical behavior.

Measuring the achievements

Table 34 shows the measures we will use to evaluate our efforts to maintain a high-performing, 

diverse workforce in FYs 2021 and 2022. 

Table 34. Goal 3 — Performance measures 

Measure

FYs 

2021 –

2022

Target

1. Whether, as part of its recruiting efforts for entry-level examiners, FCA has ensured 

that at least 25% of its outreach efforts target applicants with a disability or who are 

members of a minority group.

Yes

2. Whether we have maintained or improved our score from last year in the annual 

employee satisfaction survey.

Yes
Farm Credit Administration FY 2022 Proposed Budget and Performance Plan

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Performance Measurement and Reporting

Our performance measurement system evaluates our progress in achieving the goals of our 

Strategic Plan for FYs 2018 to 2023. The system provides a balanced view of our overall 

performance, taking into account the inputs used, the products and services produced, and the 

achievement of desired outcomes. As we have shown in this report, the agency-level measures

are linked to our strategic goals.

Our chief executive officer, with assistance from our chief operating officer and designated office 

directors, is responsible for measuring performance by collecting and analyzing performance 

data. The chief executive officer monitors the agency’s progress and results relative to the 

agency-level measures on a quarterly basis. Periodic performance reports are provided to the 

FCA board. The annual performance report is incorporated in the FCA Performance and 

Accountability Report, which is submitted to the president and Congress.
Copies are available from

Office of Congressional and Public Affairs

Farm Credit Administration

1501 Farm Credit Drive

McLean, VA 22102-5090

703-883-4056 

www.fca.gov

0421/100