Remarks by

The Honorable Dallas P. Tonsager

Board Member, Farm Credit Administration

Wisconsin Farm Credit Legislative Conference

Madison, Wisconsin

March 30, 2015

Good afternoon. It is great to be with you today. I am so glad to return to Wisconsin and the 

Cooperative Network. 

As many of you know, I am now beginning my second Board term with the Farm Credit 

Administration after spending four years as the USDA Under Secretary for Rural Development. 

When I began my first term on the FCA Board 10 years ago, I delivered my first official remarks 

to your group, so I’m pleased to be with you again to deliver the first remarks of my second 

term.

I look forward to working with my colleagues on the FCA Board, Chairman Ken Spearman and 

Board Member Jeff Hall. The Chairman has put forward an agenda that makes good sense, and 

I am pleased to support it. But first I’d like to point out that any opinions I express here today are 

my own and may not necessarily reflect official Agency views.

Since I am still getting up to speed on the current issues facing the System and since FCA 

officials are not allowed to discuss pending rules, I thought I would share with you my views of 

rural America and what I believe the future holds for both rural America and agriculture. And I 

look forward to hearing your views today, as well. By sharing our perspectives, I believe we can 

find ways to provide better service to agriculture and rural America. 

I am an advocate. I have devoted my career to farming and to strengthening rural communities 

across the country. As a member of the FCA Board, I will be listening closely to all parties in 

rural America who seek solutions to the problems we face. I will also be making the case to 

everyone who listens that rural Americans need to invest in themselves and their friends and 

neighbors.

Before becoming Under Secretary for Rural Development, I ran a consulting business to help 

develop rural projects. In fact, I developed a blue cheese processing plant for the Wisconsin 

Farmers Union; it’s located in the village of Montfort, about an hour from here. 

I would like to take a moment to talk about arm’s length regulation. We all know the history of 

the Farm Credit System. We remember the challenges the 1980s brought and the 

transformation that the System and FCA went through. 

Much of today’s current success is due to the introduction of arm’s length regulation. With an 

arm’s length regulator, the System has more credibility among investors. And thanks to investor 

confidence, the System now has some of the best bond rates in the world. It also enjoys an 

unprecedented level of confidence from the farm community and members of Congress. For the 

System to continue to meet the needs of agriculture and rural America, the credibility that FCA 

gives the System is critical. Because of good examination processes and close oversight, the 

System largely avoided the financial challenges that plagued the other financial Governmentsponsored enterprises six years ago. 
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I remember the 1980s very well. I was a farmer myself. I remember the hard times that 

agriculture went through. Because of the extended period of low prices and the collapse in land 

values, farmers experienced huge losses. 

The difficult times also led to a significant contraction of credit, and this contraction only

increased the hardship for farmers. Local lenders pulled back, and the Farm Credit System had 

to restructure and seek financial support from Congress. 

Fortunately, the System is now better positioned to manage hard times. Plus, I don’t foresee 

any circumstances on the horizon that would be as dire as those we faced in the 80s, but there 

are some real concerns. 

After several years of strong prices, commodity prices have dropped by nearly half. On top of 

this, the increase in the value of the dollar is expected to dampen export demand. Also, support 

for corn ethanol is under increasing pressure. 

If these challenges lead to tough times for agriculture, how will private banks and the Farm 

Credit System respond? This is a critical question to consider because farmers need 

dependable, affordable sources of credit in hard times even more than they do in good times. 

As Under Secretary for Rural Development, one of my biggest concerns was the loss of risk 

capital in rural America, and I continue to be concerned about this. In rural America, we don’t 

always invest in ourselves and our communities as much as we could. We often wait for others 

to invest in us. That means the investors get the profits, and we lose out. 

Developments in agriculture in the 1990s created lots of opportunity for investment. Newgeneration cooperatives, biofuels, and value-added agriculture all created financial mechanisms 

that allowed us to invest locally. As rural Americans, we need to again take some calculated 

risks to invest in ourselves by finding ways to add to the value of what we produce. We need to 

give ourselves permission to lose once in a while so we can all succeed in the end. 

While I was Under Secretary, I was pleased to have been involved with the Farm Credit System

in the creation of new Venture Capital funds. Licensed by USDA Rural Development, these 

funds are now starting to make their first investments. It is my hope that they will provide new 

opportunities for investment that will help grow the spirit of entrepreneurship in rural America. 

I hope to spend a good part of my term on the FCA Board exploring the work of our land-grant 

universities in entrepreneurship, new value-added products, and new crops. I believe that these 

universities may be the source of the next big thing in agriculture—the next ethanol industry or a 

new crop. As a former farmer, I can say that we have become artists at growing soybeans, corn,

wheat, and livestock, but we need to prepare ourselves for what’s next. To do that, we need to 

challenge ourselves and to be open to new opportunities and new risks. 

Finally, because of its status as a Government-sponsored enterprise, Farm Credit has a special 

responsibility to take on hard challenges. Great work has been done to serve small, beginning, 

and young farmers. And I look forward to seeing progress on other fronts, too. We need to look 

closely at those people and places that need greater help. 

Farm Credit has two powerful resources—its financial success and the skills of its workforce. By 

building on its financial success, the System can continually improve its service to farmers and 

ranchers. But I would argue that the skills of its workforce are an even greater resource than its 
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financial success. Why? You and your employees have proven yourselves time and again to be 

real problem solvers, and innovation is key to solving the problems of rural America. I hope you 

will continue to bring those skills to bear. 

In closing, I would like to thank you for your leadership and your service to farmers and rural 

Americans here in Wisconsin. In know you share my concern and my hope for the future of rural 

America. I look forward to your questions.