FCS Financial: One Hundred Years July 2016 | Page 71

By 1985 the Farm Credit System was holding $69.8 billion in
outstanding loans and the national farm debt reached $212 billion.
An estimated 200,000 to 300,000 American farmers, approximately 28
percent, were facing financial failure. During 1985, the Farm Credit
System’s losses totaled $2.7 billion, the largest one-year loss of any
financial institution in U.S. history.
National statistics from the United States Department of
Agriculture and the Food and Agri cultural Policy Research Institute
projected 8.5 percent of all farm operators would sell out each
year for the next four years. If those farm assets were liquidated, it
would further erode land values and farm equity. In the November/
December 1985 issue of Farming magazine, Del Banner, president
of the Farm Credit Council, the legislative arm of the Farm Credit
System, declared, “There’s no light at the end of the tunnel on the
farm economy.” The reduced earnings of the system was making
investors nervous, driving up interest costs on bonds which reduced
earnings even further, creating a vicious circle. Something had to be
done to stop the bleeding.
Floodwaters inundate the association office on Highway 19 north of
Hermann during March of 1985.