What is the Farm Credit System?
The Farm Credit System is a network of borrower-owned lending cooperatives and related institutions that provide credit and related services to farmers, ranchers, agricultural cooperatives and rural borrowers. Congress created it to bring a dependable source of agricultural credit to rural areas.
The Farm Credit Administration, an independent federal agency, regulates and examines the System, and its website explains how the cooperative structure works.
Historical details are on the Farm Credit Administration's site, which also explains how the agency examines the institutions it oversees.
How is it organized?
Local lending associations make most loans to borrowers. Behind them stand banks that fund the associations, and a funding arm that raises money for the whole System in the capital markets. Territories and structure differ across the country, so the association that serves your county depends on where you farm.
Because associations are separate organizations, their loan policies and products can differ. Talking with the one that serves your area gives you the real picture.
You can usually find the association serving your county by searching the directory the Farm Credit Council or your state's Farm Credit banks provide.
What does borrower-owned mean?
Many Farm Credit associations are cooperatives, which means borrowers can become voting stockholders. In practice, a borrower generally buys a small ownership stake as part of getting a loan, and may have a say in electing the board. Some associations also share part of their earnings with borrowers through patronage distributions, though that depends on the association's results and policies.
Ask any association how ownership works, what the stock requirement is, and what happens to your stock when the loan is paid off.
What kinds of loans and services are offered?
Farm Credit lenders commonly offer operating loans, equipment loans, real estate loans, and financing for processing and marketing businesses and rural homes. Many also provide leasing, crop insurance, record keeping and financial planning support. Offerings differ among associations, so ask what is available near you.
Some associations have programs aimed at young, beginning and small farmers. Ask whether yours does, and what the eligibility conditions are.
If your operation is not a traditional farm, such as a small acreage, a rural home or a value-added business, ask whether the association serves that need, since policies vary.
How do I approach an association step by step?
Prepare as you would for any lender.
Be ready to explain how your plan holds up in a poor year. Associations want to see reserves, insurance and flexibility, not only a good-year projection.
Many associations will walk you through the process for free, including help interpreting your records. Take them up on it, and ask what they would normally recommend for someone at your stage. Keep notes from each conversation, including the names of the people you meet. Associations reorganize and officers move, so your own record of what was said helps.
- Find the association that serves your county through the Farm Credit directories.
- Call and ask which loan officer works with your type of operation.
- Gather financial statements, tax returns, production history and a cash flow plan.
- Explain what you want to finance, how you will repay and what collateral you can offer.
- Ask for the full terms in writing and compare them with other offers.
What do loan officers look for?
Like other lenders, Farm Credit officers examine your ability to repay, your financial strength, your management record, the collateral and the purpose of the loan. They are often farm people themselves and understand cycles, so you can talk about a bad year plainly.
Give them a plan that shows how you will manage risk, such as crop insurance, marketing plans, reserves and a backup if prices fall.
Ask the officer what they would want to see more of in your records. Their answer shows you where to tighten up before a formal application.
What should I keep in mind?
Farm Credit is a good option to consider, but it is not the only one, and it is not a government loan program. This article does not recommend any lender. Compare terms from several sources, including FSA programs if you are a beginning farmer or cannot get credit elsewhere.
Ask questions about stock, fees, early payoff and how the association handles a tough year. A good lender will answer plainly.
Key takeaways
- The Farm Credit System is a network of agricultural lending cooperatives overseen by the Farm Credit Administration.
- Borrowers generally become owners of their local association.
- Services range from operating and real estate loans to leasing and insurance.
- Terms and programs differ by association.
- Compare offers from more than one lender.
Sources and official links
Last reviewed: November 12, 2026. Written by the Farm Money & Grants Editorial Team. Educational only, not tax, legal or financial advice. See our editorial policy.